External Debt Arrears Resolution
- Treasury is accelerating the process of re-engagement with international partners and creditors in order to clear arrears on external debt. Following the roadmap developed in Lima, Treasury is in dialogue with the international financial institutions who are our creditors, seeking to eventually clear the US$2.5 billion owed to the African Development Bank, the World Bank and the European Investment Bank.
- Simultaneously, Treasury is engaging key Paris Club creditors with a view to restructuring US$2.8 billion owed to them. Such debt resolution will help restore the international credit standing of Zimbabwe, resulting in improved access to new external credit lines and investment flows.
- Negotiation on this process will continue at the WB/IMF Annual Meeting in Bali, Indonesia from 10 — 14 October 2018.
Fuel Market
- The pressure on the Reserve Bank of Zimbabwe to source and allocate foreign currency for fuel consumption on a monthly basis is enormous. One long term solution is to create a world-class “Regional Fuel Dry Port” out of the Mabvuku Loading Gantry and Msasa Depot fuel storage facilities. The vision for this inland fuel port will turn it into a vital regional fuel port that will serve neighbouring countries.
- An additional pipeline could also be built from Beira to the fuel storage facility in order to increase capacity.
- A strategy in this regard will be developed and new investors invited, so that in the end the multiple fuel importers can source their own foreign currency in the market.
- The concept of a Dry Fuel Port is an important economic development issue. The Ministry of Finance will work with Ministry of Energy and Power Development in order to realise the vision for a Dry Fuel Port for the Region.
Revenue Collection Measures
- Treasury introduced the Intermediated Money Transfer Tax with effect from 1 January 2003 through the Finance Act 15 of 2002. The tax was set at 5 cents per transaction, which was a specific tax. However due to the increase in informalisation of the economy and huge increase in electronic and mobile phone based financial transactions and RTGS transactions there is need to expand the tax collection base and ensure that the tax collection points are aligned with electronic mobile payment transactions and RTGS system.
- The information we have so far is that in 2018 1.7 billion transactions went through as compared to 50 million four years ago.
- I hereby review the Intermediated Money Transfer Tax from 5 cents per transaction to 2 cents per dollar transacted, effective 1 October 2018.
- I am therefore directing financial institutions, banks and ZIMRA, working together with telecommunication companies to extend the collection to all electronic financial transactions.
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