Taxpayers that were settling their quarterly obligations in foreign currency are now required to pay half of that in Zimbabwe dollars, Finance and Economic Development minister Mthuli Ncube (pictured) said on Friday in a move meant to promote the use of the local unit.
The new measure comes as the government is battling to rescue the Zimbabwe dollar which is being elbowed out of transactions with the greenback accounting for more 70% of the total transactions.
“Government will for the June Quarterly Payment Date (QPD) require taxpayers to settle 50% of their foreign currency portion of their corporate tax obligations in local currency,” Ncube.
The second QPD is June 25 in which taxpayers are expected to pay 25% of their annual corporate income taxes.
The new measure also comes as the central bank has begun selling foreign currency to banks at market determined rates which has stabilised the exchange rate.
Taxpayers are compelled to settle the obligations in local currency if the law requires them to do so and the government will 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, Ncube said.
“Taxpayers without adequate Zimbabwe dollars 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,” Ncube said.
Zimbabwe has seen a sharp depreciation of the local currency which has fuelled a spike in prices with annual inflation bucking the trend last month, rising to 86.5% from 75.2% in April.