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Treasury widens ZW$ usage, orders 100% Corporate tax payments in local currency

By Alois Vinga

THE Finance Ministry has further widened ZW$ usage after ordering 100% Corporate tax payments in the local currency amid a stern warning for companies to be prepared to face the penalties for resorting to the parallel market to raise ZW$ to settle their tax obligations.

The Treasury earlier moved to improve the foreign exchange trading system by allowing the market to determine the official rate, relaxing tax payments in the ZW$ currency among other measures.

After weeks of rampant ZW$ depreciation since last month, this week the exchange rate revealed signs of stability after a slight depreciation by about 3%.

The alternative market traders are in fact struggling to fund the current official rate of US$1:ZW$7 000.

Impressed by the development, the Treasury moved to announce additional measures , further widening the ZWL usage.

“Government will, for June 2023 Quarterly Payment  Date (QPD) , require taxpayers to settle 50% of the foreign currency portion of their corporate tax  obligations in local currency.

“Where the law requires the tax liability to be paid in local currency , taxpayers  are compelled to pay such tax obligations exclusively in local currency .Government will therefore not accept payments in US$ or any other foreign currency for the portion of corporate income tax due in local currency for the June QPD,” said Treasury in a statement.

Authorities also announced that taxpayers without adequate ZW$  to meet the local currency tax obligation should urgently approach the Reserve Bank of Zimbabwe through their banks to facilitate disposal of their US$ holdings in order to access the requisite Zimbabwe dollars.

“Corporates are strongly discouraged from engaging in parallel market transactions for settlement of taxes as they will face sanctions from the Financial Intelligence Unit.

“The usual Statutory penalties for late payment of taxes due shall be vigorously applied.

“The government is committed to continuing the currency reforms that have enabled the economy to be competitive and will continue to fine tune the foreign currency markets in order to achieve lasting price stability,” added the Treasury.

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