News / Local
Zimdollar remains the sole legal tender
05 Jul 2023 at 07:14hrs | Views
THE Government has reiterated that the Zimbabwe dollar remains the sole legal tender and nothing can be billed exclusively in foreign currency without special exemption.
This follows the continuous blatant disrespect for this directive on the part of several local authorities, Government departments, agencies and other organisations, which are either issuing notices to the contrary or keep charging for services only in United States dollars.
Harare City Council attempted to switch to US dollar rates collection last week but the Government shot down the illegal attempt a day later, making it clear that the Zimbabwe dollar was the only legal currency and that billing for services in foreign currency could only be done if provided for by law.
In a statement yesterday, the Ministry of Finance and Economic Development said charging exclusively in foreign currency was not only in contravention of the law, but also militated against Government policy.
"On May 29, 2023, Government directed that all Government agencies including local authorities should collect fees and levies in local currency in order to promote the wider use of domestic currency.
"However, Government notes with concern the outright disregard of this directive by certain local authorities and Government agencies who either have gone ahead to issue notices to the contrary or continue charging services exclusively in United States dollars. The City of Harare is one such case in point," reads the statement.
The ministry also reminded all Government agencies and local authorities to comply with the Government directive with immediate effect.
"For the avoidance of doubt, transactions that are excluded from the scope of domestic transactions are clearly stated in the Exchange Control (Exclusive Use of Zimbabwe Dollar for Domestic Transactions) Regulations, 2019 published in Statutory Instrument (SI) 212 of 2019 and these do not include billing of rates by local authorities and charging of services by Government agencies.
"Government remains committed to the broad use of local currency for domestic transactions which started in 2019 when Government adopted the use of the Zimbabwe dollar."
According to SI 85 of 2020, persons with free funds cannot be compelled to pay in foreign currency. The ministry also cited several legal instruments that were promulgated by the Government to facilitate the re-introduction of the Zimbabwe dollar including Statutory Instrument 142 of 2019, which effectively ended the multi-currency system and determined the "Zimbabwe dollar" as the sole legal trading currency in the country.
"This made the ZWL the sole legal tender for all settlements in Zimbabwe and any billing for services in foreign currencies can only be done if provided for by the law or if exempted in terms of the Exchange Control Regulations.''
A few weeks ago, Government announced additional measures to encourage the use of the local dollar as opposed to the US dollar, in a bid to boost the local unit and tame rising consumer inflation.
The measures include a directive that all Government departments collect fees in local currency, the introduction of a 1 percent tax on all foreign payments and that all customs duty be payable in local currency, with the exception of designated or luxury goods and where an importer opts to pay in foreign currency.
Resultantly, the Zimbabwe dollar has been gaining against the US dollar and yesterday, it firmed again by another 7 percent on the wholesale auction for banks stocking up on foreign currency, and the much smaller auction for large direct importers, with the weighted average now $5 395,9619 to US$1.
This has brought the total gain in the value of the Zimbabwe dollar to 22 percent since the local currency bottomed out in value.
Under the National Development Strategy 1, Government has made considerable progress in fostering macroeconomic stability by implementing a broad range of fiscal and monetary stabilisation measures.
Of late, there has been notable stability in the economy, the exchange rate and general prices of goods and services.
This follows the continuous blatant disrespect for this directive on the part of several local authorities, Government departments, agencies and other organisations, which are either issuing notices to the contrary or keep charging for services only in United States dollars.
Harare City Council attempted to switch to US dollar rates collection last week but the Government shot down the illegal attempt a day later, making it clear that the Zimbabwe dollar was the only legal currency and that billing for services in foreign currency could only be done if provided for by law.
In a statement yesterday, the Ministry of Finance and Economic Development said charging exclusively in foreign currency was not only in contravention of the law, but also militated against Government policy.
"On May 29, 2023, Government directed that all Government agencies including local authorities should collect fees and levies in local currency in order to promote the wider use of domestic currency.
"However, Government notes with concern the outright disregard of this directive by certain local authorities and Government agencies who either have gone ahead to issue notices to the contrary or continue charging services exclusively in United States dollars. The City of Harare is one such case in point," reads the statement.
The ministry also reminded all Government agencies and local authorities to comply with the Government directive with immediate effect.
"For the avoidance of doubt, transactions that are excluded from the scope of domestic transactions are clearly stated in the Exchange Control (Exclusive Use of Zimbabwe Dollar for Domestic Transactions) Regulations, 2019 published in Statutory Instrument (SI) 212 of 2019 and these do not include billing of rates by local authorities and charging of services by Government agencies.
According to SI 85 of 2020, persons with free funds cannot be compelled to pay in foreign currency. The ministry also cited several legal instruments that were promulgated by the Government to facilitate the re-introduction of the Zimbabwe dollar including Statutory Instrument 142 of 2019, which effectively ended the multi-currency system and determined the "Zimbabwe dollar" as the sole legal trading currency in the country.
"This made the ZWL the sole legal tender for all settlements in Zimbabwe and any billing for services in foreign currencies can only be done if provided for by the law or if exempted in terms of the Exchange Control Regulations.''
A few weeks ago, Government announced additional measures to encourage the use of the local dollar as opposed to the US dollar, in a bid to boost the local unit and tame rising consumer inflation.
The measures include a directive that all Government departments collect fees in local currency, the introduction of a 1 percent tax on all foreign payments and that all customs duty be payable in local currency, with the exception of designated or luxury goods and where an importer opts to pay in foreign currency.
Resultantly, the Zimbabwe dollar has been gaining against the US dollar and yesterday, it firmed again by another 7 percent on the wholesale auction for banks stocking up on foreign currency, and the much smaller auction for large direct importers, with the weighted average now $5 395,9619 to US$1.
This has brought the total gain in the value of the Zimbabwe dollar to 22 percent since the local currency bottomed out in value.
Under the National Development Strategy 1, Government has made considerable progress in fostering macroeconomic stability by implementing a broad range of fiscal and monetary stabilisation measures.
Of late, there has been notable stability in the economy, the exchange rate and general prices of goods and services.
Source - The Herald
