Finance Minister Mthuli Ncube has accused the Harare City Council and other government agencies of militating against government policies by directing residents to pay rates exclusively in United States dollars.
With the Zimbabwean dollar at its excruciating downfall, the government of Zimbabwe decided to to promote the wider use of domestic currency by proclaiming that taxes would be paid in local currency.
Harare City Council, however, last week, issued a notice to residents directing them to pay rates in US dollars.
In a statement on Tuesday, The Ministry of Finance reversed this decision accusing the local authority and other state departments of opposing government policies.
“Recently, government introduced additional measures to promote the use of local currency and these include the settlement of tax obligations in local currency among others, as part of the raft measures being undertaken,” read the statement.
“On the 29th of May 2023, government directed that all government Agencies including Local Authorities should collect fees and levies in local currency in order to promote the wider use of domestic currency.
“However, government notes with concern the outright disregard of this directive by certain Local Authorities and Government Agencies who either have gone ahead to issue notices to the contrary or continue charging services exclusively in United States Dollars. The City of Harare is one such case in point.
“The behavior is not only in contravention of the law but also militates against Government Policy. Therefore, all Government Agencies and Local Authorities are reminded to comply with the government directive with immediate effect.
“Government remains committed to the broad use of local currency for domestic transactions which started in 2019 when Government adopted the use of the Zimbabwe Dollar.”
The Ministry further stated that several legal instruments had been promulgated by the government to facilitate the re-introduction of the Zimbabwe dollar namely the Presidential Powers (Temporary Measures) (Amendment of Reserve Bank of Zimbabwe Act and Issue of Real Time Gross Settlement Electronic Dollars (RTGS Dollars) Regulations, published in Statutory Instrument 33 of 2019.
Meanwhile, Harare City Council town clerk Hosiah Chisango has since said that residents and ratepayers would still pay in currency of choice. He claimed that council decision to bill in US dollar was necessitated by the need to preserve value against the backdrop of massive exchange losses.
But, he said, ratepayers had various payment options available including payment in local currency when settling their bills.
“The City is alive to the various statutory instruments on the currencies in Zimbabwe and particularly Statutory Instrument 85 of 2020 which is an important instrument in Zimbabwe that reintroduced the multi-currency system through the legalization of foreign currency usage,” he said.
“Harare is owed ZWL149,3 billion as at 31 May 2023 and the debt is categorized as follows, commerce and industry 51,1 percent, domestic: 41,6 percent and dormitory towns 2,91 percent. The debtors figure was US$57,59 million as at 31 May 2023 and if we are to convert it using the prevailing official rate of today it is now US$25,76 million and the exchange losses amount to 55,5 percent.”
Chisango said the huge debtors book is affecting the capacity of the City to provide basic services to the residents adding that Council income is largely local currency while the expenditure is foreign currency denominated.
“If the situation is allowed to persist, service delivery will collapse because the City will not be able to recapitalize and will also fail to pay for goods and services particularly water treatment chemicals and fuel.
“The drive to recapitalize operations has since slowed down because suppliers are demanding payment in foreign currency which the City does not have. In terms of creditors, these stood at ZWL39,3 billion as at 31 May 2023.”
