Professor Mthuli Ncube, the Finance and Economic Development Minister, has announced that as of May 15th, 2023, the Reserve Bank of Zimbabwe (RBZ) will allow dealers to retain 100% of foreign currency from domestic sales.
In a statement seen by Pindula News, Minister Ncube said the move is meant to promote the banking of domestic sales of foreign currency in the banking system. He said:
100% Retention of Domestic Foreign Currency Earnings.
In order to promote the banking of domestic sales foreign currency in the banking system, the Reserve Bank of Zimbabwe will with effect from 15 May 2023, exempt all proceeds from domestic sales in foreign currency from the 15% surrender requirement.
The Reserve Bank of Zimbabwe declared in February of this year that authorized dealers must sell 15% of their domestic sale proceeds to the central bank at the prevailing interbank market rate within 48 hours of receiving the funds. In a statement seen by Pindula News, RBZ Governor, Dr John Mangudya said:
In line with the liberalization of the foreign exchange market, Authorised Dealers are advised that the foreign exchange retention on domestic sales has been reviewed upwards to 85%, with effect from 06 February 2023.
This requirement shall apply to all foreign exchange deposits from domestic sales of goods and services, with the exception of deposits of entities listed in Annexure A.
Authorised Dealers are required to sell to the Reserve Bank, the 15% of domestic sale proceeds at the prevailing interbank market rate. The foreign exchange shall be sold to the Reserve Bank within 48 hours from the date of receipt of the funds.
This comes amid reports that some dealers avoid paying taxes and fail or neglect to submit all of their foreign currency earnings to the Reserve Bank of Zimbabwe.
Some analysts have been urging the government to provide incentives for compliance to encourage dealers to bank their foreign currency.
A snap survey conducted by Pindula News found that certain dealers in Harare’s central business district (CBD) sell their goods in US dollars without providing receipts to customers, creating challenges in determining foreign currency sales as dealers can argue that products were purchased using local currency.