Zimra goes after businesses rejecting ZiG

The Zimbabwe Revenue Authority (ZIMRA) has launched a sweeping operation targeting businesses that are evading taxes and undermining the Zimbabwean currency (ZiG or ZWG) by rejecting the local currency or falsely claiming their Point of Sale (POS) machines are malfunctioning.

This decisive action comes as the tax authority strives to bolster resource mobilisation for crucial national development projects, aligning with the National Development Strategy.

The move follows a stern warning from President Mnangagwa on Wednesday to economic saboteurs, assuring the nation that his administration will protect citizens from businesses engaging in exploitative practices that harm the economy. The President's statement underscored the government's commitment to safeguarding the interests of ordinary Zimbabweans.

ZIMRA's initiative includes the establishment of an automated and confidential whistle-blowing platform. This platform aims to facilitate the reporting of unscrupulous companies that are deliberately stifling demand for and usage of the local currency by forcing consumers to pay exclusively in foreign currency. The authority is urging members of the public to partner with them in this fight against tax evasion and the smuggling of goods.

"Zimbabwe has been experiencing significant growth in infrastructure development, including the construction of roads, dams, and schools," reads a ZIMRA statement.

"This progress has been driven by domestic tax revenue mobilisation, which is only possible if everyone plays their part. The Zimbabwe Revenue Authority (ZIMRA) is therefore calling upon members of the public to partner the Authority in the fight against tax evasion and smuggling of goods in the country."

The statement further details the whistle-blowing platform, encouraging voluntary reporting of tax and customs offences.

"The authority is encouraging all corporate citizens and individuals to come forward and report any malpractices, particularly in relation to businesses that may be refusing to trade in local currency or those that purport to have out-of-service POS machines just as a means to force payment of goods/services in United States dollar cash. We encourage the public to provide the information voluntarily and out of goodwill.

"Zimra still offers an automated and confidential whistleblowing platform which can be accessed from anywhere across the length and breadth of the country and the globe. The reporting platform is safe, secure and all data will be handled with confidentiality and will only be accessible to selected and authorised Zimra officials."

The recent depreciation of the ZiG against the US dollar on the black market, despite initial gains following its launch in April, has highlighted the challenges facing the local currency. Some businesses have been accused of manipulating prices by using the black market exchange rate, exacerbating the issue.

Market analysts have noted that the current exchange rate fluctuations are not supported by underlying macroeconomic or microeconomic fundamentals.

Economist Marvelous Mandisodza believes ZIMRA's actions will stimulate demand for the ZiG and curb rent-seeking behaviour.

"This is the way to go. Creating a whistle-blowing mechanism helps in curbing business malpractices. The measures by Zimra are noble and we expect more when the Reserve Bank of Zimbabwe Monetary Policy Committee meets soon to explore ways to stabilise the local currency," Mr Mandisodza stated.

Chris Mugaga, chief executive officer of the Zimbabwe National Chamber of Commerce, emphasised the need for all stakeholders to support the ZiG to achieve national objectives. He highlighted the importance of the central bank upholding its commitment to avoid further money printing.

"The market should defend the ZiG because once the local unit fails, it will retard all efforts of having our own currency. The measures by ZIMRA, while noble, are merely addressing the symptoms," Mr Mugaga explained.

Kurai Matsheza, a prominent industrialist and former president of the Confederation of Zimbabwe Industries, while acknowledging the government's efforts to stabilise the ZiG, stressed the need for further action.

"One other thing that we have always said is that let the exchange rate be allowed to float and it will establish its own premium. We also need to avoid printing of money," Mr Matsheza commented.

The situation underscores the complex interplay between government policy, business practices, and the stability of the Zimbabwean currency, the ZiG.