Recent changes in currency laws in Zim

24 Mar, 2022 - 00:03 0 Views
Recent changes in  currency laws in Zim

The Herald

Godknows Hofisi

In this article I provide a summary of the recent changes in currency laws in Zimbabwe. The article is highly summarised due to space considerations.

Summary of recent laws

Some of the recent laws on currency are listed below. Those by way of Court decisions are excluded from this article.

  • Statutory Instrument 33 of 2019 — Presidential Powers (Temporary Measures) Amendment of Reserve Bank of Zimbabwe Act and Issue of Real Time Gross Settlement Electronic Dollars (RTGS) Regulations, 2019 (Issued 22 February 2019)
  • Statutory Instrument 142 of 2019 – Reserve Bank of Zimbabwe (Legal Tender) Regulations, 2019 (Issued 24 June 2019),
  • Finance Act No. 2 of 2019 (Issued 21 August 2019)
  • Statutory Instrument 212 of 2019 – Exchange Control (Exclusive use of Zimbabwe dollar) (Issued 27 September 2019)
  • Statutory Instrument 85 of 2020 – Exchange Control (Exclusive use of Zimbabwe Dollar for Domestic Transactions) (Amendments) Regulations, 2020 (No. 2) (Issued 29 March 2020)
  • Exchange Control Circular No. 3 of 2020 (Issued end of March 2020)
  • Statutory Instrument 185 of 2020 – Exchange Control (Exclusive use of Zimbabwe Dollar for Domestic Transactions) (Amendments) Regulations, 2020 (No. 3) (Issued 24 July 2020)
  • Statutory Instrument 127 of 2021 — Presidential Powers (Temporary Measures) (Financial Laws Amendments) Regulations 2021 (Issued 26 May 2021)
  • Finance Act No. 7 of 2021 (Issued 31 December 2021).

The above laws are explained below.

Please note that regulations made in terms of the Presidential Powers (Temporary Measures) Act (Chapter 10:20) expire after 181 days (6 months) according to section 6(1) of the Act.

Statutory Instrument 33 of 2019 —Presidential Powers (Temporary Measures) (Amendment of Reserve Bank of Zimbabwe Act and Issue of Real Time Gross Settlement Electronic Dollars (RTGS) Regulations, 2019 (Issued 22 February 2019)

This was issued by the President in terms of section 2 of the Presidential Powers (Temporary Measures Act (Chapter 10:20).

The salient features being that:

  • It introduced a new section 44C to the Reserve Bank of Zimbabwe Act (Chapter 22:15).
  • According to section 4(1) of SI 33, through the said section 44C the Minister of Finance shall be deemed to have prescribed the following with effect from the date of promulgation:
  • Issuance of the RTGS dollar by the RBZ,
  • RTGS system balances expressed in United States dollars immediately before 22 February 2019 shall be deemed to be opening balances in RTGS dollars at par with the United States dollar (one to one conversion).
  • Use of the one to one conversion rate for accounting purposes for balances immediately before 22 February 2019.
  • After 22 February 2019, subsequent use of exchange rate determined by authorized dealers based on willing seller willing buyer basis.
  • Statutory Instrument 142 of 2019

This was issued by the Minister of Finance in terms of the RBZ Act.  According to section 2(1) of the SI, with effect from 24 June 2019, the Zimbabwe dollar was to be the sole currency for legal tender. It outlawed use of foreign currency as legal tender in Zimbabwe.

Finance Act No. 2 of 2019

Section 21 of the Act enacted provisions of SI 33 of 2019 as it confirmed insertion of and provisions of the new section 44C to the RBZ Act. Section 22 enacted the said section 44C as it was contemplated in SI 33 of 2019.

Section 23 of the Act enacted SI 142 of 2019 by making the Zimbabwe dollar the sole currency for legal tender purposes in Zimbabwe.

Section 212 of 2019

The SI was issued by the President in terms of section 2 of the Exchange Control Act (Chapter 22:05).

The main provisions being:

  • Section 3(1) that no person who is a party to a domestic transaction shall pay or receive any other currency other than the Zimbabwe dollar.
  • Section 3(2) outlawed trading in any currency other than the Zimbabwe dollar.

Statutory Instrument 85 of 2020

This was issued by the President at the commencement of COVID-19 restrictions in Zimbabwe, in terms of section 2 of the Exchange Control Act (Chapter 22:05).

The key change being that this amended SI 212 of 2019. It allowed payment for goods and services using free (foreign currency) funds.

Exchange Control Circular No.3 of 2020

This was issued by the President in terms of section 2 of the Exchange Control Act (Chapter 22:05).

It amended SI 212 of 2019 by allowing dual pricing and displaying, quoting and offering of prices for goods and services in both Zimbabwe dollar and foreign currency at the ruling exchange rate.

Statutory Instrument 127 of 2021

The SI was issued by the President in terms of section 2 of the Presidential Powers (Temporary Measures) Act.

The main provisions being that section 3 of the SI repealed the Schedule (section 11) to the Exchange Control Act and substituted it with a new section 11— Civil penalty orders.

The schedule now cites civil infringements which include:

  • Use of foreign currency from foreign exchange auction or authorised dealers for purposes other than that specified upon application thereof.
  • Charging goods exclusively in foreign currency and declining the Zimbabwe dollar.
  • False information in foreign currency application, return or document.
  • Trading goods at rates above or below the ruling exchange rate.’
  • Issuing a receipt other than in the currency used for transacting.
  • Finance Act No.7 of 2021
  • This had the effect of enacting the provisions of SI 127 of 2021.
  • There have been numerous changes in currency laws, main of which targeted trading.

Disclaimer

This simplified article is for general information purposes only and does not constitute the writer’s professional advice.

Godknows (GK) Hofisi, LLB(UNISA), B.Acc(UZ), CA(Z), MBA(EBS,UK) is a legal practitioner / conveyancer, chartered accountant, corporate rescue practitioner, registered tax accountant and consultant in deal structuring and is an experienced director of companies. He writes in his personal capacity. He can be contacted on +263 772 246 900 or [email protected]

 

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