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Govt introduces ZiG200,000 civil penalty for violating official exchange rate

Mthuli Ncube Rules Out Scrapping 2% Tax
Mthuli Ncube, is the Finance Minister in the Zimbabwe cabinet appointed by president Emmerson Mnangagwa and past chief economist and Vice President of the African Development Bank.

Zimbabwe’s Finance Minister Mthuli Ncube, backed by President Emmerson Mnangagwa, has enacted a new regulation penalizing businesses for pricing goods and services above the official exchange rate, the Government Gazette announced on Thursday.

The Exchange Control (Amendment of Schedule to Exchange Control Act) Notice, 2024, introduces a civil penalty for any natural or legal entity that sells goods or services at rates exceeding the average interbank foreign currency selling rate set by the Reserve Bank of Zimbabwe.

Previously, the law permitted pricing up to 10% over the official rate. The amendment to Paragraph 2 of the Schedule to the Exchange Control Act now enforces a fixed penalty of ZiG200,000 or the equivalent value of the foreign currency charged, whichever is higher. Additionally, a daily cumulative penalty of up to five percent of the unpaid fixed penalty may be applied.

The revised statute also allows a 48-hour grace period for offenders to justify their pricing to a designated officer before the penalty is confirmed. Failure to present a valid explanation will result in the automatic issuance of the penalty, while a satisfactory cause will lead to its withdrawal and a record of this action in the civil penalty register.

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