New finance measures vex Zimbabwe companies
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A notice from the Zimbabwe Revenue Authority said on Friday that “the new currency affects clearance of designated goods,” with duty payable funds from foreign currency accounts for importers being “converted” at the prevailing exchange rate.
RBZ governor John Mangudya has pegged the exchange rate for bond notes against the US Dollar at 1:2.5, while the parallel market has somewhat stabilised at 1:3.5. Zimbabwe denominated its mobile money, electronic funds and bond notes as RTGS dollars in what has been seen by many as a precursor to a new local currency.
Rangarirai Mberi, a spokesperson for Metallon Gold, said this week that the chamber of mines of Zimbabwe and mining companies in the country were still assessing “the impact of measures announced in the recent monetary policy” statement.
Although the government has lifted foreign exchange controls, companies have started to feel the impact of the new measures.
“Basically, customs duty has gone up by 2.5percent and on top of that it still has to be paid in forex, but will be accounted for in RTGS. This will have an effect on values, which have gone up,” said a tax consultant based at Beitbridge.
Customs clearance experts said this effectively meant that the chargeable customs duty had indirectly been raised through levying of taxes in local currency using the new exchange rate.
“All values on the bill of entry will be reflected in RTGS dollars though payment would be made in forex as per legislation,” said Zimra in its notice to stakeholders.
Zimbabwe Stock Exchange (ZSE) listed tobacco and logistics company TSL also said on Friday that it was delaying its financials for the year to the end of October “pending the issuance of guidance from the Public Accountants and Auditors Board on the functional and presentation currency” for reporting entities.
“The company has since obtained the necessary regulatory approval to extend the date by which the group's audited financial results should be published to March 31, 2019. Consequently, the company's annual general meeting has been postponed,” said James Muchando, the company secretary for TSL.
Market analyst Tatenda Nema- ungwe said some investors were now weighing their options, with more opting to exit markets in the country. The ZSE has been weaker this week and stock brokers said they expected to see more foreign investors selling off stocks.
“As we speak, foreign investors on the ZSE for example are stampeding to ship out dividends, capital gains and initial capital from the exchange, amounting to 50 percent of the value, that's not a joke,” said Nemaungwe.