Part-payment of tax in local currency to bolster economy

Story by Stanley James, Business Editor

ECONOMIC experts have described government’s order for local firms to pay half of their taxes in local currency as a move that will bolster the use of the Zimbabwe Dollar.

Treasury on Friday ordered companies to pay half of their United States Dollars in Zimbabwe dollars for the June Quarterly Payment Date (QPD).

A tax expert at Baker Tilly, Mr Simba Hamudi has described the move as noble in ensuring wide use of the local currency.

“Obviously the net effect is the use of the Zimbabwe Dollar, the move is being intended to promote the use of the local currency so going forward we are really embracing the initiative as a step in the right direction provided it is implemented and fully realise the benefits of consolidating the use of the Zimbabwe Dollar,” he said.

A development economist, Dr Prosper Chitambara explained the benefits of such measures that are meant to create demand for the local currency.

“It is a positive development that the government is requiring companies to settle their tax obligations in local currency, I think this will help to increase and enhance the value of the local currency which should have a very strong stabilising effect on the exchange rate so going forward the current thresholds clearly need to be reviewed further but at the same time it is important to sustain the reform agenda on the monetary, fiscal and social agenda which will help to anchor economic growth because no country can develop without its own currency,” he highlighted.

 Zimbabwe is stepping up efforts to bolster the use of the local currency to consolidate current economic gains and facilitate industrial competitiveness and overall economic growth as the country cannot sustain its needs by using other people’s foreign currency.

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