News / National
'Bulawayo 80% forex rates illegal'
20 Feb 2024 at 00:04hrs | Views
GOVERNMENT has said the decision by the Bulawayo City Council to force residents and businesses to pay 80 percent of rates strictly in foreign currency is illegal and ordered the local authority to reverse the move with immediate effect.
In coming up with the resolution, the council argued that service providers were demanding payment in foreign currency hence the decision, which meant residents and businesses were going to be paying only 20 percent in the local currency.
Bulawayo Town Clerk, Mr Christopher Dube, confirmed the development over the weekend claiming the council had no choice as its service providers were demanding 100 percent forex or 80 percent forex for those that still accept local currency. The move sparked a widespread outcry from residents and businesses who accused the council of taking a hard stance against its clients while defying clear Government policy.
Permanent Secretary in the Ministry of Finance, Economic Development and Investment Promotion, Mr George Guvamatanga, said the resolution by the Bulawayo City Council was against Government policy on the use of the dual currency system, which stipulates that the transacting public is free to pay using either of the currencies in the basket, including the local unit.
He said communication has since been sent to the Ministry of Local Government and Public Works, as the parent ministry, to direct the Bulawayo City Council to immediately reverse its decision.
"This resolution is against the Government's position on the use of multiple currency. The transacting public is free to pay using either of the currencies in the basket," said Mr Guvamatanga.
"Government departments and agencies are, however, further encouraged to promote the use of the local currency.
"Treasury has already communicated this position to all Government departments and agencies. Relevant communication is being sent to the parent ministry for Bulawayo City Council to immediately reverse this illegal demand," said Mr Guvamatanga.
The Treasury's position is consistent with the stance taken by the Government last year when the Harare City Council decided to bill residents in forex.
As such, Mr Guvamatanga said local authorities should be reminded of Statutory Instrument 33 of 2019 when the Government adopted the use of the Zimbabwean dollar, which was introduced in February 2019 through the Presidential Powers (Temporary Measures) (Amendment of Reserve Bank of Zimbabwe Act.
In a letter to the Ministry of Local Government and Public Works on the Harare case, Mr Guvamatanga said charging and billing in United States Dollars only by any local authority is unlawful and contravenes the above-cited laws.
The Permanent Secretary said it should be up to individuals with free funds to opt to pay their services in forex, and that rates and services should not be charged in foreign currency.
Meanwhile, residents have blasted the council over the forex decision with Bulawayo United Residents Association (Bura) chairperson Mr Winos Dube expressing shock over the stance.
He said it was clear that the council was not pro-poor residents but instead was turning itself into an elitist grouping against its people.
Bulawayo Progressive Residents Association (BPRA) secretary for administration Mr Thembelani Dube, said the country has a multi-currency regime, which means services and goods can and should be charged using any of the currencies, hence the decision by the council was contrary to what the country's laws say and showed that BCC was being impossible in its dealings with residents.
Zimbabwe National Chamber of Commerce (ZNCC) Matebeleland Chamber executive, Mr Mackenzie Dongo, said it was not true that all businesses are charging in forex and that such claims send a signal that the economy has to be fully dollarised.
"Obviously business has to follow the ratios, sending a wrong precedent. We are in a multi-currency scenario where we accept all forms of payments and currencies. In as much as we may bear with BCC, the signal being sent is wrong," he said.
In coming up with the resolution, the council argued that service providers were demanding payment in foreign currency hence the decision, which meant residents and businesses were going to be paying only 20 percent in the local currency.
Bulawayo Town Clerk, Mr Christopher Dube, confirmed the development over the weekend claiming the council had no choice as its service providers were demanding 100 percent forex or 80 percent forex for those that still accept local currency. The move sparked a widespread outcry from residents and businesses who accused the council of taking a hard stance against its clients while defying clear Government policy.
Permanent Secretary in the Ministry of Finance, Economic Development and Investment Promotion, Mr George Guvamatanga, said the resolution by the Bulawayo City Council was against Government policy on the use of the dual currency system, which stipulates that the transacting public is free to pay using either of the currencies in the basket, including the local unit.
He said communication has since been sent to the Ministry of Local Government and Public Works, as the parent ministry, to direct the Bulawayo City Council to immediately reverse its decision.
"This resolution is against the Government's position on the use of multiple currency. The transacting public is free to pay using either of the currencies in the basket," said Mr Guvamatanga.
"Government departments and agencies are, however, further encouraged to promote the use of the local currency.
"Treasury has already communicated this position to all Government departments and agencies. Relevant communication is being sent to the parent ministry for Bulawayo City Council to immediately reverse this illegal demand," said Mr Guvamatanga.
As such, Mr Guvamatanga said local authorities should be reminded of Statutory Instrument 33 of 2019 when the Government adopted the use of the Zimbabwean dollar, which was introduced in February 2019 through the Presidential Powers (Temporary Measures) (Amendment of Reserve Bank of Zimbabwe Act.
In a letter to the Ministry of Local Government and Public Works on the Harare case, Mr Guvamatanga said charging and billing in United States Dollars only by any local authority is unlawful and contravenes the above-cited laws.
The Permanent Secretary said it should be up to individuals with free funds to opt to pay their services in forex, and that rates and services should not be charged in foreign currency.
Meanwhile, residents have blasted the council over the forex decision with Bulawayo United Residents Association (Bura) chairperson Mr Winos Dube expressing shock over the stance.
He said it was clear that the council was not pro-poor residents but instead was turning itself into an elitist grouping against its people.
Bulawayo Progressive Residents Association (BPRA) secretary for administration Mr Thembelani Dube, said the country has a multi-currency regime, which means services and goods can and should be charged using any of the currencies, hence the decision by the council was contrary to what the country's laws say and showed that BCC was being impossible in its dealings with residents.
Zimbabwe National Chamber of Commerce (ZNCC) Matebeleland Chamber executive, Mr Mackenzie Dongo, said it was not true that all businesses are charging in forex and that such claims send a signal that the economy has to be fully dollarised.
"Obviously business has to follow the ratios, sending a wrong precedent. We are in a multi-currency scenario where we accept all forms of payments and currencies. In as much as we may bear with BCC, the signal being sent is wrong," he said.
Source - The Chronicle
