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Zimra demands tax in forex from firms charging US$

THE Zimbabwe Revenue Authority (Zimra) has started demanding that companies that charge for goods and services in United States dollars also remit taxes similarly, a move analysts say affirms that bond notes, electronic and mobile money transfers do not hold the same value as the greenback.

BY TATIRA ZWINOIRA

Zimra reports directly to Treasury pending the appointment of a new board, indicating these new demands were supported by government.

“Zimra has noticed that there are businesses that are trading, withholding and collecting VAT [value-added tax], PAYE [pay-as-you-earn], capital gains tax and other taxes in multi-currencies. Following this observation, Zimra has found it necessary to clarify that these businesses should remit taxes in the specific currencies in which they collect them without any conversion to RTGS [real time gross settlement], bond notes, local point of sale and mobile money,” Zimra said in Public Notice Number 45 of 2018.

Zimra commissioner-general Faith Mazani did not respond to phone calls from NewsDay seeking further clarity. According to government sources, Zimra’s notice was meant to dissuade companies from charging goods or services in forex.

However, one former banker, who did not want to be named, said as long as businesses imported, prices of goods or services would continue to be charged in forex.

“They could also be trying to stop businesses from going to the parallel market to change their foreign currency into RTGS balances to pay taxes, which becomes cheaper, but it will not work,” the former banker said.

Zimbabwe National Chamber of Commerce chief executive officer Christopher Mugaga said what Zimra announced was not an admission, but a reconfirmation that all forms of payment in Zimbabwe were valueless unless it was in forex.

“The admission came through separating nostro foreign currency accounts from a nostro RTGS and that was already an admission … So, it could be a reconfirmation that the 1:1 parity is a joke, which cannot be trusted by anyone,” he said.

“If the 1:1 parity was to be maintained or realistic, then no one should knock on your doors to say ‘because you received your US dollars in hard currency, pay in hard currency’. Why would you be demanding if the two currencies are equal?”

 

Source : Newsday

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