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blast duty on 'luxury' goods
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.
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
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
"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
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
"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.
being subsidiary legislation, have to be in conformity with Acts
of Parliament. Where they are not in conformity, they are null and
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
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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