Review foreign currency withdrawal charges, Govt urged

Individuals and companies have implored the government to review its levy on foreign currency withdrawals, saying it would discourage banking and increase the cost of doing business and services.

The government recently announced a raft of measures including the withdrawal levy where two percent is charged for every transaction above US$1 000, which is an increase from US$0.05 to at least US$20.

Other measures included the suspension of lending by banks, to curb the runaway inflation, stabilise the Zimbabwean dollar but these ‘controversial’ measures have been criticised for appearing punitive to citizens.

“This policy measure clearly signifies that the Government is currently seized with revenue collection as opposed to creating an enabling environment for business to bloom. The assumption that any foreign currency that is withdrawn from the banks is traded on the parallel market is superficial,” said the Zimbabwe National Chamber of Commerce (ZNCC) as part of its submissions to the Ministry of Finance and Economic Development.

ZNCC said this was unjustified and noted that given the policy measure, there also should be a maximum value for which the two percent is applicable, of which after that limit; a flat fee would be applied.

“The levy will discourage banking, and increase the cost of doing business and the move is a denial to the reality that our economy has become so informalised that such a policy stance will be ineffective. The money outside the banking system will earn more premium, promoting black-market trading,” the chamber said.

In an interview with a local weekly, Reserve Bank of Zimbabwe (RBZ) governor John Mangudya said the central bank had identified some big corporates which were borrowing money from banks and channelling it to the black market.

Mandudya said the companies will face punitive punishment.

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