TREASURY is considering scrapping the payment of duty for
vehicles in foreign currency when it presents the mid-year fiscal policy at the
end of this month, it has been revealed.
On June 24, the government outlawed the multicurrency
system that had had been in place for a decade, but maintained the policy which
compels vehicle importers to pay duty in foreign currency.
Finance secretary George Guvamatanga told captains of
industry at a meeting in Harare last week that government was mulling scrapping
the policy.
“I think that issue is currently under review and a
position will be articulated maybe in two to three weeks’ time when we come
back to the market with our
midterm fiscal policy,” he said.
Finance minister Mthuli Ncube in November last year
introduced the levying of customs duty and other related taxes in foreign
currency on imported motor
vehicles, among other “non-productive goods”, as part of
measures to restrict the outflow of the United States dollar.
The majority of Zimbabweans resort to buying second-hand
cars from countries such as Japan and the United Kingdom because locally
assembled vehicles are beyond
their reach.
Zimbabwe has been choking under the shortage of foreign
currency for a number of years because of poor performance of exports and a
high import bill.
The country adopted a basket of currencies in 2009 to stem
hyperinflation with the US dollar and South African rand being the most used
currencies.
However, resurgent inflation and the collapse of the local
currency forced the government to abruptly abandon the multiple currencies
policy.
Guvamatanga said the government also expected employees
that were still earning in foreign currency to settle their Pay As You Earn (Paye)
in forex.
He said the mid-term fiscal policy would be used to
fine-tune some measures introduced under Statutory Instrument 142 of 2019,
which banned the use of multiple
currencies.
“All these outstanding issues will then be corrected,” he
said. “There are issues that we have realised need cleaning up and that will be
done in about three weeks’ time,
“I think from a principle point of view, we agree that we
want to increase demand for RTGS$ and lessen the flow into the parallel market.
“People should not be looking for funding to pay duties and
taxies in foreign currency.”
At least two cases have been filed at the High Court
challenging S1 142 of 2019 on the grounds that it violated the Reserve Bank of
Zimbabwe Act.
A lawyer, Godfrey Mupanga, backed by the Zimbabwe Lawyers
for Human Rights is filed an application seeking the scrapping of the statutory
instrument on the
grounds that it is unconstitutional.
Mupanga argued that the decree by Ncube was illegal because
such decisions should be approved by Parliament.
“Amending a principal legislation is a primary law-making
power that can only be exercised by Parliament,” he said in his court papers.
“Such delegation would in fact amount to abrogation and
abdication of legislative authority to an executive functionary.”
Opposition leader James Busha also filed a High Court
application challenging the introduction of the real gross settlement (RTGS)
currency, saying the
presidential powers used in ushering in the currency
reforms are unconstitutional.
Veritas, a local legal think-tank said there was no legal
instrument barring business from trading in foreign currency. Standard
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