One of the shockers from the latest budget presented before Parliament today by the Minister of Finance is that duty on imported cars and specified goods will now have to be paid for in foreign currency instead of Ecocash/RTGS or Bonds.
Honourable Members will be aware that Government has, over the years, implemented demand management measures with a view to redirect usage of the scarce foreign currency to productive industries. Such measures include adjustments to the customs duty regime and control of imported goods through the licensing system.
Despite some success, Government has, during the course of 2017 and 2018, witnessed a surge in the importation of nonproductive goods, particularly motor vehicles.
In order to redirect use of scarce foreign currency to the productive sectors of the economy, I propose that customs duty on motor vehicles be levied in foreign currency acceptable as legal tender, with effect from 23 November 2018.
Several weeks ago there were rumours that duty would now be paid in foreign. Government officials rubbished these claims as fake news. It is now clear that whoever leaked these things clearly had their ears close to the ground and knew what they were saying.
The rule does not apply to kombis, taxis and other commercial vehicles
This measure will, however, not apply on imports of commercial motor vehicles and vehicles for use by the physically challenged.
Duty on selected goods will also now have to be paid in forex
Furthermore, payment of customs duty in foreign currency will also apply on Selected Goods
If you are wondering what these Selected Goods are. You can download a list of these Selected Goods by tapping/clicking this link. The good news is that for now this does not seem to apply to tech gadgets-for now. Who knows what else the tax hungry government will add to their list of Selected Goods.
Again the exchange rate is clearly no longer one as to one
The government is artificially keeping the exchange rate at one as to one. Yet when it suits them they are essentially demanding payment in foreign currency while making it illegal for everyone else to do the same. They keep issuing bond notes and increasing RTGS balances, they keep paying civil servants in bond notes, RTGS and Ecocash.
They are trying to have their cake and eat it too. The fundamentals of Economics will not allow that. There will be some sort of reckoning I imagine. We are at the cusp of full macroeconomic meltdown if this sort of blatant discrimination is allowed to continue businesses will close or resort to the black market.