Zimbabwe Imposes 1% Charge On Foreign Payments For Six Months
Zimbabwe’s President, Emmerson Mnangagwa, has issued Statutory Instrument 107 of 2023, known as the Exchange Control (Control of Payments) (Charge on Specified Outbound Foreign Currency Payments) Regulations, 2023, which imposes a one percent charge on all outbound payments from Zimbabwe to any foreign country for the next six months.
The charge will be levied by all banks and similar institutions, including mobile money transfer agencies that pay an entity outside the country. The collected funds will be deposited into a Debt Redemption Sinking Fund established in terms of section 32 of the Public Debt Management Act.
The new regulations aim to stem the loss of value of the local currency, which has been declining in recent months. The charge applies to funds obtained from the Dutch Auction Foreign Currency Market operated by the Reserve Bank of Zimbabwe every week, or from the interbank market operated by banks to payees outside Zimbabwe.
The one percent rate will be charged on outbound foreign payments, with a maximum of US$50,000 or the equivalent in any other foreign currency. The charge will be applied to payments exceeding US$5 million.
Banks must withhold and remit the outbound foreign currency charge on each transaction and pay it into the fund within 10 days of the payment.
Financial institutions covered by the new regulations include banks, building societies, the Reserve Bank of Zimbabwe, the Zimbabwe Development Bank, ZimPost, and all providers of mobile banking services.
