Editorial Comment: Enforce mono-currency, bring offenders to book

By now everyone in Zimbabwe is perfectly aware that all goods and services sold or provided in Zimbabwe must be paid for in Zimbabwean dollars, with the small number of exemptions carefully listed and controlled.

While the laws exist to punish those who do this, enforcement is erratic at best and sometimes it appears the authorities are not doing their job to enforce the laws.

To take one growing example, there are service stations that try to sell petrol and diesel in US dollars. They are breaking the law, unless they are among the few specially licensed service stations that import their own fuel using their own free funds, and are listed as such with the authorities who can check that they are compliant with the special rules.

Service stations that take advantage of a surge in demand caused by the current shortages to switch to foreign currency are breaking both ethical and legal limits.

Ethically, they have no leg to stand on. They buy their fuel from their oil company with a Zimdollar electronic payment, so there is no reason why they should not sell that same fuel to their customers for Zimdollar electronic payments.

The mark ups, carefully agreed on in negotiations with the regulator, are fixed as part of the final maximum retail price.

The regulator follows a simple formula when setting that final maximum price, taking into account the landed cost of the fuel in Zimbabwe, the exchange rate used by oil companies when they pay for the fuel, the mark-ups permitted to importer and retailer, the mark-up for transport and the slice taken by the Government in excise duties.

The only reason a service station tries to sell for US dollars, or demands Zimbabwean bank notes, is sheer greed and a desire to play the black markets in currency and cash.

We see the same problem with small shops, tuckshops and vendors who try the same stunt when selling scarcer items or, more precisely, when they manipulate the markets to gain a corner in some commodity like roller meal and then try to profiteer.

But those tuckshops selling for US dollars, or the vendors using the boot of a car as their shop, actually buy their goods using Zimdollar electronic payments or buy their goods from smugglers.

Legally imported goods sold in the formal sector are sold for Zimdollars, so the tuckshop buying from smugglers and selling for US dollars is breaking two sets of laws and the owner is probably not paying Zimra tax either, making a third offence.

In recent interviews, Finance and Economic Development Minister Professor Mthuli Ncube has warned that the Government will be stepping in and enforcing its laws.

But he also tries to explain that there are Zimbabweans who are still mentally adjusting to having their own currency.

After a year, we would like to think that mental adjustments should be complete and that those cheating are doing so because they are greedy and are getting away with it, rather than because they are confused.

Having good laws that are not enforced causes problems.

We have seen this in a quite different area, illegal gold mining. For some years, there was little enforcement of a perfectly sensible and reasonable set of laws that did allow informal mining and panning, but also insisted on certain rules being followed.

It was only when gangs of these miners started wandering around clutching machetes and robberies and murders started rising sharply that the authorities sprung into action.

Enforcement is now being done, but the 2 500 plus illegal miners already arrested are an indication that enforcement was left slack for too long.

We could see the same problem if the authorities do not clamp down now, and clamp down hard, on those breaking the currency laws.

A good place to start would be with service stations.

Despite what sometimes appears to be overtrading in this sector, the number of service stations is not that large.

For safety reasons, as well as other considerations, licensing is enforced so every service station is listed and its address and owners are known.

All that is required is for the authorities to be tipped off when a service station breaks the law, and that is easy to arrange with telephone hotlines.

Some official can then make a personal investigation and gather sufficient evidence that will satisfy any court.

But the penalties need not all be criminal. Licences have been suspended and that is perhaps an even more effective weapon.

If you cannot buy fuel to sell, then you cannot charge in foreign currency.

The rationale for suspending a licence, or even cancelling a licence, is that the owners cannot be trusted to follow the law and so cannot be allowed to be in that business.

It would only take a few exemplary hits against offenders for the message to get around and for all service stations to follow the law.

To give the sector its due, most do obey the law since they do not want to risk the wrath of the authorities, but a good crack of the whip every time there is an offence will keep the majority on the straight and narrow.

Tuckshops are harder to police.

There are a lot of them, most are not properly licensed and they are difficult to police.

However, their customers, from surveys we have done, expect minimum standards and again a hotline for tips, even anonymous tips, would reveal some offenders.

A few carefully planned raids by police and tax officials would start getting the message across that messing around with the currency and tax laws is not going to make your business flourish.

Indeed, it will probably close it down.

So the time has now come to stop talking and start acting. Excuses have worn thin and the authorities need to act before people start thinking that they can get away with these crimes because “everyone else does”.

Once there are a few high-profile prosecutions or other actions by the authorities then the overwhelming majority will decide that being honest and legal is the only way to make a decent living.

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