Businesses that charge for goods and services using parallel market exchange rate will now face stiffer penalties following the introduction of Statutory Instrument 127 of 2021 (SI 127 of 2021) published by government yesterday.
This is the latest move by government to stabilize the local currency which has been subject to market distortions.
Currently the official exchange rate stands at ZWL$84 against the United States dollar despite market participants using parallel rates of up to ZWL$ 130.
According to SI 127 of 2021 businesses that refuse to take local currency at the official exchange rate for goods or services priced in USD may face a fine of up to ZWL$50,000.
Government policy stipulates that business cannot price or charge goods and services exclusively in USD.
“A natural or legal person shall be guilty of a civil infringement if he or she, being a seller of goods or services not authorized by law to charge for them exclusively in foreign currency, refuses to allow any buyer thereof to tender payment for them in Zimbabwe dollars at the ruling exchange rate,”
“In the event of default in complying with subparagraph (3), the civil penalty shall provide for— (a) a combination of— (i) a fixed penalty of the amount of fifty thousand Zimbabwe dollars or an amount equivalent to the value of the foreign currency charged for the goods or services in question (whichever is the greater amount); and (ii) a cumulative penalty over a period not exceeding ninety days of five per centum of the outstanding amount of the fixed penalty for each day (beginning on the day after the service of a civil penalty order) that the fixed penalty or any outstanding amount thereof remains unpaid by the defaulter,” reads the S.I.
There is a maximum of 48 hours to appeal if one is found guilty of distorting the exchange rate.
But if the submission fails to prove innocence, the offender will have to pay the penalty in stipulated time failure which a 5 percent per day of the charge becomes effective over the next 90 days on top of the fine.
If the 90-day lapses without the fine being paid, the offender faces a six-month to a year prison sentence.
For businesses participating in the foreign currency auction market, they will be slapped with a fine of ZWL$ 1 million or the equivalent amount to the value of the foreign currency taken from the auction if they do not use the money for intended purposes.
The Interventions come at a time the market was characterized by multiple exchange rates ranging from ZWL$84-ZWL$130 per US$1.
