Business / Economy
Zimbabwe losing millions through the borders daily
08 Apr 2014 at 15:55hrs | Views
The country is facing serious cash leakages which have resulted in millions of dollars passing through the borders into neighbouring countries on a daily basis, an official said.
Zimbabwe Revenue Authority (Zimra) commissioner general Gershem Pasi said this while presenting oral evidence to the Parliamentary Portfolio Committee on Foreign Affairs this morning.
He said individuals and corporate were allowed to pass through the borders with a maximum of $10 000 on each trip.
"Too much money is being exported and we have submitted our concerns to the government so that we can at least have some measure of control on it," he said.
He said they had made recommendations for Government to cap the amount allowed to be carried so that it is not open-ended.
"We can then look at whether or not to keep it at $10 000 or reducing it," he said.
Pasi noted that banks were also contributing to the problem as they were keeping too much money in nostro accounts.
A nostro account is an account one bank holds with a bank in a foreign country, usually in the currency of that country. This is usually for the purposes of international payments and allows for easy cash management because currency doesn't need to be converted.
"At banking level, we have nostro accounts where banks keep money outside the country to cater for visa transactions. There are reports that too much money is being kept in these accounts," he said.
Pasi said the money does not earn interest when it is out there so the authority had made recommendations to government to treat that money as if it is earning interest for the purposes of tax.
This is expected to reduce the amounts being kept in foreign accounts.
Zimbabwe Revenue Authority (Zimra) commissioner general Gershem Pasi said this while presenting oral evidence to the Parliamentary Portfolio Committee on Foreign Affairs this morning.
He said individuals and corporate were allowed to pass through the borders with a maximum of $10 000 on each trip.
"Too much money is being exported and we have submitted our concerns to the government so that we can at least have some measure of control on it," he said.
He said they had made recommendations for Government to cap the amount allowed to be carried so that it is not open-ended.
"We can then look at whether or not to keep it at $10 000 or reducing it," he said.
Pasi noted that banks were also contributing to the problem as they were keeping too much money in nostro accounts.
A nostro account is an account one bank holds with a bank in a foreign country, usually in the currency of that country. This is usually for the purposes of international payments and allows for easy cash management because currency doesn't need to be converted.
"At banking level, we have nostro accounts where banks keep money outside the country to cater for visa transactions. There are reports that too much money is being kept in these accounts," he said.
Pasi said the money does not earn interest when it is out there so the authority had made recommendations to government to treat that money as if it is earning interest for the purposes of tax.
This is expected to reduce the amounts being kept in foreign accounts.
Source - BH24
