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Confusion reins over Mthuli Ncube's budget currency

by Staff reporter
20 Feb 2019 at 10:05hrs | Views
CONFUSION still reins over Finance minister Mthuli Ncube's 2019 budget statement, which is in United States dollars, yet it remains unclear whether or not prescribed fines are payable in bond notes or in real time gross settlement (RTGS).

The Finance No 3 Bill sailed through both Houses of Parliament in January and now awaits gazetting into law, albeit the inconsistencies.

In Senate, during debate on the Bill, senators asked Ncube to explain whether amounts payable to the Consolidated Revenue Fund through Zimra, and stated in US dollar, can be paid using bond notes or RTGS.

"The bond note is the legal tender. In terms of our policy, it is set at 1:1 to the US dollar. Citizens are paying the government at this rate. This is in terms of Section 44 of the Reserve Bank Act, there is no confusion," Ncube responded in Senate.

Further asked by Harare Metropolitan Senator Theresa Makone if she could pay in bond notes in circumstances where she is fined US$30, Ncube said it would be permissible.

He said the issue of parity in the context of the Finance Act 2019 would be restricted to payments to government, as government had a policy on parity of the US$ to bond notes.

But legal think-tank Veritas said the Finance Act 2019 had inconsistencies, where sometimes amounts were stated simply as "dollars", and at other times they were stated as "United States dollars" or "US$".

They said in law, Ncube's responses to senators were, however, correct.

"Section 17(1) of the Finance (No.2) Act 2009 inserted a new section 44A into the Reserve Bank of Zimbabwe Act which empowers the Minister of Finance to make regulations prescribing that a specific foreign currency or currencies will be legal tender, either in all transactions or in transactions specified in the regulations," Veritas said.

Currencies that are deemed permissible include the British pound, the euro, US$, South African rand, the Botswana pula and others, which are legal tender in Zimbabwe.

But the former Zimbabwean currency, the Zimdollar, ceased to be legal tender with effect from 2015 through Statutory Instrument 70 of 2015.

"When the word 'dollar' was used on and after February 1, 2009, therefore, it was generally intended to refer to the US dollar. It would be absurd to contend otherwise," Veritas said.

The legal think-tank added that the practice by some government departments and agencies reported to be insisting on payments in US$ for services and rejecting payments in bond notes or RTGS at one is to one parity was, therefore, illegal.

However, Veritas noted that section 115 of the Customs and Excise Act empowered the minister to designate goods to be foreign currency dutiable, such as his pronouncements that a specified class of motor vehicles will pay duty in US$.

Source - newsday

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