Govt gets tough on parallel market instigators

07 Oct, 2021 - 15:10 0 Views
Govt gets tough on parallel market instigators Reserve Bank of Zimbabwe

The Sunday News

Vusumuzi Dube, Online News Editor

THE Government has warned companies that peg their prices according to the parallel market rate that they risk losing their licenses.

Over the past few weeks, the Reserve Bank of Zimbabwe (RBZ) Financial Intelligence Unit (FIU) has swooped in on illegal foreign currency dealers, naming and shaming individuals that have been abusing mobile telecommunications services to further their illegal deals.

In a public advisory on measures being instituted by government to curb illegal foreign currency dealings and parallel market price benchmarking today, the Minister of Finance and Economic Development, Professor Mthuli Ncube said they were seized with instituting various measures to curb illegal trade in foreign currency and its associated twin evil that of parallel market benchmarking or indexation of prices of goods and services at parallel market exchange rates.

“The recent resurgence of these practices, which have been identified as significant contributions 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 of serious concern.

“Over the past 36 months, the government has instituted numerous initiatives to bring macro-economic stability. These include fiscal consolidation which has resulted in balanced budget performance and the elimination of destabilizing fiscal deficits despite major economic shocks such as the 2019-20 droughts, Cyclone Idai and the ongoing threat of the Covid-19 pandemic,” said Prof Ncube.

Among the measures which the Ministry has introduced to compliment those that have been enacted by the RBZ, the Minister said all companies found on the wrong side of the law risk losing their licences.

“The Zimbabwe Revenue Authority (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. Zimra will also be carrying out compliance audits with respect to compliance with the Location tax introduced during the 2021 fiscal year.

“Business which disregard the law and continue pricing their goods on the parallel market rates will have their licenses suspended. Members of the public are also strongly encouraged to report to the FIU and the National Economic Inspectorate, all business entities directly or indirectly benchmarking prices at parallel market exchange rate,” said the Minister.

Prof Ncube said the capacity of the FIU and other law enforcement agencies to investigate and prosecute violations of the Bank Use Promotion Act will be enhanced.

“The FIU will continue to closely monitor and analyse financial transactions to identify, expose and take action against perpetrators of money laundering and other financial crime.

“Regulatory bodies including the Public Accountants and Auditors Board, will also be working on a framework to impose appropriate financial and professional sanctions or 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,” said the Minister.



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