By Alois Vinga
PRESIDENT Emmerson Mnangagwa Thursday issued new regulations outlining deterrent penalties to be imposed on all companies which are abusing the Reserve Bank of Zimbabwe (RBZ) foreign exchange auction platform.
The development comes after a visible trend of indiscipline by companies which access foreign currency from the auction at reasonable premiums but proceed to peg the prices of goods and services at higher prices.
Recently, the Zimbabwe Revenue Authority reported that several companies were evading payment of taxes in foreign currency despite having collected revenue in hard currency.
A number of shops produce receipts denominated in the local currency despite having collected US dollars from the customers.
Some of the auction’s beneficiaries are allegedly diverting foreign currency earned from the auction for different purposes.
But using Presidential Powers, Mnangagwa issues SI 127 of 2021 bringing into effect a new schedule of the civil penalties and arrangement thereof in respect of the infringement of the Foreign Exchange Act and the Banking Use and Promotion Act.
The penalties will be issued by the RBZ depending on the severity of the infringement.
“One will be guilty, if he or she without Exchange Control authority, uses the foreign currency obtained directly or indirectly from a foreign exchange auction or an authorised dealer for a purpose other than that specified in the application to partake in the auction or in the application for foreign currency,” the SI said.
One will also be guilty if caught charging for goods and services in the line with the official exchange rate.
Submitting an application for foreign currency to the RBZ without following due diligence to verify the correctness of the information in or accompanying the application, return or document will be an offence.
The central bank will also penalise the display or offers of goods or services for sale at an exchange rate above the ruling exchange rate, or impose for the predominant purposes of encouraging payment in a foreign currency or allows a discount on foreign currency payments.
Issuance of a receipt in Zimbabwe dollars for payment received in foreign currency will be penalised.