Business leaders want 100% local currency QPD payments

LIVINGSTONE MARUFU

 

The captains of the industries and multiple analysts are pushing the Treasury to allow companies to fully settle their quarterly obligations in local currency to create value for the Zimbabwe dollar.

The push comes after Finance and Economic Development minister Mthuli Ncube last week directed that those who were settling their quarterly obligations in foreign currency were now required to pay half of that in ZWL$ in a move meant to promote the use of the local unit.

The government is battling to rescue the local unit which is being elbowed out of transactions with the greenback accounting for over 70% of the total transactions.

The Zimbabwe National Chamber of Commerce president Mike Kamungeremu told Business Times that the government should sustain measures that promote ZWL usage.

“We hope in the next quarter, it will be 100% so that the demand for ZWL$ continues to increase,” Kamungeremu said.

He said the current measures have arrested rampant exchange rates and in some instances the rates are coming down.

Last week, parallel market rates were ZWL$9000 per US$1. This week, the exchange rate has gone down to ZWL$8500 per US$1 while the official rate has retreated to ZWL$6326.58 per US$1 from ZWL$6926.57 per US$1 last week.

“We commend the government for allowing businesses to pay 50% QPD in local currency. The liquidity crunch is there but I think the pain is necessary.

“Those that struggle to pay should approach Zimra and propose payment plans and I appeal to the revenue authority to have a listening ear as usual,” Kamungeremu said.

He said members have settled their quarterly obligations in Zimbabwe dollars to the tax collector.

Confederation of Zimbabwe Industries president Kurai Matsheza said this has always been the plan and should be maintained.

“That has always been the push from the business to allow us to pay all the obligations in ZWL$.  All fees should be paid in local currency,” Matsheza said.

The Treasury said the tax collector has received the 50% tax payments in ZWL$.

“Most companies have settled 50% of  their June QPD corporate tax in local currency and companies were forthcoming in doing that,” Finance and Economic Development deputy minister Clemence Chiduwa said.

The second QPD was June 25 in which taxpayers paid 25% of their annual corporate income taxes.

The new measure came at a time when the central bank began selling foreign currency to banks at market determined rates which stabilised the exchange rate.

Taxpayers were compelled to settle the obligations in local currency if the law required them to do so and the government did not accept any payment in US$ or any other foreign currency for the portion of the corporate income tax due in local currency for the June QPD.

The country has witnessed a sharp depreciation of the local currency which has fuelled a spike in prices with annual inflation bucking the trend last month, rising to 175.8% in June from 86.5% in May.

 

 

 

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