Government moves to kill illegal forex deals

by | Oct 8, 2021 | Business | 0 comments

 

Nevanji Munyaradzi Chiondegwa

 

Finance Minister Professor Mthuli Ncube yesterday released a strategy communicating how Government is set to put an end to illegal foreign currency trading.

Over the past few weeks, the parallel rate has been rising and there has been an uncanny increase in prices – showing that businesses are pegging their prices on the parallel market rate.

Minister Ncube said Government, through various agencies is presently seized with instituting various measures to curb illegal trade in foreign currency.

Prof Ncube said; “The recent resurgence of these practices( parallel market benchmarking) which have been identified as significant contributors to price instability in the Economy and are imposing significant downside risks to macro-economic stability, and the erosion of domestic and international competitiveness is therefore a cause for concern,” said Minister Ncube.

He said Government will not allow unscrupulous businesses and individuals to undo macroeconomic which include fiscal consolidation (which has resulted in balanced budget performance and elimination of destabilising fiscal deficits).

Minister Ncube said it is in the national interest that the local currency is protected, as it has stabilised the current account, made us competitive on the international market and enhanced export performance and notable import substitution effect.

Below are the measures which the Ministry of Finance and Economic Development will implement, with other agencies:

 

1. ZIMRA will be carrying out impromptu audits of corporate activities with a view of quantifying potential tax liabilities arising out of illegal foreign currency trading.

 

2. ZIMRA will carry out compliance audits with respect to compliance with the Location Tax introduced during the 2021 fiscal year.

 

3. The Financial Intelligence Unit will continue to closely monitor and analyse transactions to identify, expose and take action against perpetrators of money laundering and other financial crime.

 

4. The capacity of FIU and other law enforcement agencies to investigate and prosecute violations of the Bank Use and Promotion Act as well as various AMLCFT laws will be enhanced.

 

5. Regulatory bodies including the Public Accountants and Auditors Board, will also be working on a framework to impose appropriate financial and professional sanctions on members of the accounting, auditing and other professions who may be complicit in superintending over illicit affairs by corporate entities which they are charged with running.

 

6. Business who disregard the law and continue to price their goods on the parallel market rates will have their licences suspended

 

7. Members of the public are strongly encouraged to report to the FIU and the National Economic Conduct Inspectorate, all business entities directly or indirectly benchmarking prices at parallel market exchange rates.