The Treasury has directed government agencies and parastatals to collect fees in Zimbabwe dollar, among a raft of measures to shore up the local currency which is playing second fiddle to the greenback in transactions.
Payment of electricity tariff by non-exporters will now be in local currency so will be customs duty with the exception of designated or luxury goods and when the importer opts to pay in foreign currency, Finance minister Mthuli Ncube said in a statement on Monday.
He said the Treasury will now fund the local currency component of the 25% foreign currency surrendered by exporters in order to “eliminate the creation of additional money supply”.
“The foreign currency collected from the 25% that is surrendered will now be collected by the Treasury and utilised in servicing the foreign currency loans assumed from the Reserve Bank of Zimbabwe,” Ncube said.
The measures come as the local currency has depreciated sharply against the dollar amid fears the economy is heading towards full dollarisation.
The dollar was trading above ZWL$3000 on the thriving parallel market compared to ZWL$1,888 on the foreign currency auction system.
The new measures come as 70% of transactions are in dollars and the remainder in local currency, according to the central bank.
Ncube introduced a 1% tax on all foreign payments. He maintained the US$ cash withdrawal tax at 2%. Ncube reduced the local interbank foreign transaction IMTT to 1% and the POS IMTT tax in foreign currency to 1% in order to promote the banking of foreign currency by the informal sector promoting the use of the local currency.
The Treasury chief said the assumption of external obligations and implementation of non-inflationary financing of liabilities, coupled by sourcing of additional resources, “will go a long way in reducing money supply growth and its impact on exchange rate depreciation and price increases”.
Critics say the new measures may be “too little too late” as the dollarisation juggernaut rolls on.