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Lawyers blast duty on 'luxury' goods
The Standard (Zimbabwe)
May 13, 2007

The government should speedily reverse the decision to levy duty in foreign currency on imported goods because it hurts women and families that they support, a lobby group has said.

Lawyers have advised the move by government is insupportable.

The Women’s Coalition of Zimbabwe (WCoZ) has reacted angrily to Statutory Instrument 80A of 2007 saying Zimbabweans have progressively become poorer due to high inflation rates and heavy unemployment. "Women are already the poorest of the poor and the statutory instrument will further impoverish them very heavily," the Coalition said.

Describing Statutory Instrument 80A of 2007, which demands that import duty for so-called luxury items be paid in foreign currency with immediate effect, "as retrogressive to economic empowerment" of women and access to sustainable livelihoods, the WCoZ said it is disturbed by the fact that the Statutory Instrument ignores Reserve Bank Regulations which stipulate that Zimbabwe dollars are legal tender.

With an unemployment rate of 80% and with many women and families depending on the informal sector, WCoZ said that a large number of women are cross-border traders who scrape a living by trading in small items. Most of the goods that women sell have been designated as luxury items. These include suitcases, handbags, leather items, tableware and kitchenware of wood, jewellery, motor vehicles and parts.

The new regulations will put such women and families out of business and a livelihood, the WcoZ said.

"It has been common knowledge," the WCoZ said, "that women cross-border traders sometimes face abuse from ZIMRA officials who sometimes strip search them and generally harass them as they try to make a livelihood for themselves. These regulations will further deepen the challenges that women face in their quest to survive the harsh conditions in Zimbabwe."

The women have found support in the legal fraternity, which says the Minister erred in promulgating an instrument compelling the payment of duty in respect of some items in foreign currency

In terms of Section 41 of the Reserve Bank of Zimbabwe Act, the national currency of Zimbabwe, the Zimbabwean dollar, is legal tender in Zimbabwe. A person subject to any liability or legal obligation can discharge and extinguish such liability or legal obligation by tendering Zimbabwean dollars.

Even where execution process expressed in foreign currency is issued for the attachment of his property, he can tender Zimbabwean dollars to the Deputy Sheriff and the Deputy Sheriff will be obliged to accept the Zimbabwean dollars and return the warrant of execution to the judgment creditor.

The legal profession says if the Zimbabwe Revenue Authority were to institute legal proceedings in an effort to recover duty in respect of any of the items for which they demand foreign currency, the tender of Zimbabwean dollars will discharge any liability arising from any judgment debt. The date of conversion is the date of payment. Conversion is done at the official exchange rate.

The President of the SADC Lawyers’ Association, Sternford Moyo, said Parliament in 2003, allowed the Minister of Finance to create, by a statutory instrument, an exception to the rule in the Reserve Bank of Zimbabwe Act.

"The nature of the exception," he said, "is that where the item being imported is a luxury item, the Minister may, by subsidiary legislation, require that duty in respect of the item be paid for in foreign currency. The exception is limited to luxurious items. Parliament did not authorise deviation from the provisions of the Reserve Bank Act in respect of items which are not luxurious."

Moyo said subsidiary legislation providing for non-luxurious items was not in conformity with the Reserve Bank of Zimbabwe Act and was, in fact, not authorised by the Finance Act.

"Statutory Instruments, being subsidiary legislation, have to be in conformity with Acts of Parliament. Where they are not in conformity, they are null and void."

The Minister, Moyo explained, cannot extend the exception given to him by Parliament by declaring items which are not luxurious in the ordinary and grammatical understanding of the word "luxury" to be luxuries. When he does so, he grants unto himself an exception which is wider than the exception allowed by Parliament. In other words, where designation of an item as a luxury item may strike an ordinary listener as unreasonable or incorrect or a misuse of the word "luxury", the designation of an item by the Minister is outside the powers granted to him by Parliament.

"The second cause for concern," he said, "is that it is unpatriotic and repugnant to common sense for a government to reject its own currency in preference to the currency of other nations."

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