Herald Reporter

Finance and Economic Development Minister Prof. Mthuli Ncube yesterday brought relief to motor vehicle importers, mining entities and other exporters by announcing a series of tax payment measures that are expected to boost the domestic use of the local currency.

Professor Ncube said this in a public notice on the measures adopted by the government to promote the domestic use of the Zimbabwean dollar.

In his opinion, Professor Ncube said that all mining royalties were now payable in Zimbabwean dollars up to a limit of 50% of the royalties due.

All duties and taxes on the importation of designated motor vehicles are now again payable in Zimbabwean dollars up to a limit of 50% of the duties and taxes payable.

Professor Ncube noted that all internal taxes payable by exporters on their export earnings are now payable in foreign and local currencies in direct proportion to approved export retention levels.

For example, an exporter who receives USD 1,000 in foreign currency at a repurchase rate of 40% (60% retention) will pay tax on the 40% in Zimbabwean dollars and the 60% in foreign currency.

Economic analyst, Mr. Persistence Gwanyanya hailed the move saying it was the best way for the government to support the Zimbabwean dollar if it receives its revenue in local currency.

He added that this would relieve exporters who paid their taxes in foreign currencies.

“What the Treasury has done is a response to calls that have been made by the Central Bank.

“Exporters who liquidated 40% of their receipts at the interbank rate will now use that money to pay their taxes and duties,” he said.

Mabvuku resident John Tinarwo said he welcomed the decision to levy part of the import duty on cars in local currency.

“It’s the right thing to do so that vehicle taxes are collected in local currency. I wish it was set at 100, but still, it’s a step in the right direction.

Another Harare resident, Sekai Nzombe, echoed similar sentiments saying the only way to sustain the local currency was to use it extensively to pay for government services.

In his advisory opinion, Professor Ncube said the ultimate goal of the new set of measures is to promote the use of local currency.

“These measures reflect the government’s commitment to promote wider use of the Zimbabwean dollar and to continuously strengthen the economy to build lasting macro-economic stability,” he said.

Professor Ncube said that the government, through various agencies, is currently seized of instituting measures to improve the formal use of the national currency and stem the illegal trade in foreign currency and its associated twin; that of the calibration of parallel markets or the indexation of the prices of goods and services.

Price calibration to the parallel market rate has significantly contributed to price instability in the economy, imposed downside risks to macroeconomic stability, and also eroded domestic and international competitiveness.

“Over the past 40 months, the government has put in place many initiatives to bring macroeconomic stability.

“These include fiscal consolidation which has resulted in balanced fiscal performance and the elimination of destabilizing fiscal deficits despite major economic shocks such as the 2019-2020 droughts, Cyclone Idai and the continued threat of the Covid-19 pandemic.

“Furthermore, the restoration of domestic and export competitiveness through the reintroduction of the Zimbabwean dollar has resulted in rapid gains in stabilizing the current account, which has also been boosted by increased international remittances. , improved export performance and significant import substitution effects.”