TINASHE MAKICHI
Government has directed its departments and local authorities to stop charging rates and services in foreign currency with immediate effect, Business Times can report.
The directive comes after various government departments and local authorities had started collecting levies and rates in foreign currency citing rising demand for foreign currency in purchasing various consumables.
The directive by the Treasury is likely going to ensure an increased participation of local authorities and some government departments on the foreign currency auction platform introduced by the Reserve Bank of Zimbabwe (RBZ) this year.
Business Times is reliably informed that the Treasury has since issued a circular to that effect.
Local authorities like Harare City Council had started collecting rates in foreign currency while state institutions like Zesa Holdings had started making proposals.
A well-placed government source told this publication that collection of rates and service fees in foreign currency was now likely going to cause discord in the financial services environment.
“The issue of charging for services in foreign currency by government departments and local authorities was getting out of hand and as you are aware the government is working hard to stabilise the local currency.
“So a directive was issued to all government departments to stop charging in foreign currency,” the source said.
Finance and Economic Development Permanent Secretary George Guvamatanga could not be reached for a comment.
HCC has approached the government to be allowed to start levying certain businesses rates in foreign currency.
Council was of the belief that this will improve revenue inflows and service delivery as it imports certain key materials needed for public works.
Council has been struggling to collect refuse and to provide clean water to residents as it is facing challenges securing forex for the purchase of water treatment chemicals and fuel.
Other government departments charging in foreign currency include the Central Vehicle Registry and the Registrar General’s Office.
The Zimbabwean dollar, re-introduced last year, has been depreciating against the greenback amid calls for the redollarisation of the economy.
