Home » Business » Cash Leakages Worry Zimra

THE Zimbabwe Revenue Authority will engage new Reserve Bank Governor Dr John Mangudya when he assumes office at the beginning of May to address cash leakages that have contributed to the obtaining liquidity challenges .

This follows reports that the country could be losing up to US$3 billion annually due to unregulated movement of cash across borders following the adoption of the multi-currency regime in 2009.

Zimra Commissioner-General Mr Gershem Pasi voiced concern over the issue when he appeared before the Parliamentary Portfolio Committee on Foreign Affairs yesterday.

“We will be discussing this with the new governor (of the Central Bank) when he assumes office and we have submitted our proposal to the ministry (of Finance and Economic Development) on our concern of export of cash. For instance the current regulations we enforce on behalf of the Central Bank, one is allowed to take in cash US$10 000 per person per trip.

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“There is no limit on how many trips one can make. So if I have a million dollars all I would need is to drive to Beitbridge with my trunk full of money and cross to Messina (South Africa) and deposit it there and make two or three trips a day,” he said.

Mr Pasi said Government had moved from a situation where there was strict control of movement of cash during the Zimbabwe dollar era to one where there were no controls at all.

He said it was important that restrictions be put in place on the amount of money an individual is allowed to carry out of the country. He said cross border traders were also responsible for exporting large sums of cash every day.

“Most of the imports really have nothing to do with economic revival so those are the areas where we will be engaging the new governor to try and also hear his thoughts and maybe win him over to our side because it is Zimra that now has to explain the deficit between exports and imports. Our aice is it’s an area that needs to be looked at,” Mr Pasi said. He added that another source of leakage was the amount of money banks were keeping in their Nostro accounts to meet their international obligations.

“We have a situation where there are Nostro accounts where banks keep money outside the country to meet their international transactions like when you have Visa cards and so on. It was okay but it was realised more money is being kept outside than is required to meet the international obligations,” he said.

Mr Pasi said they had proposed that the law stipulates that any money kept outside and over what was required by a financial institution to meet its obligation be taxed to discourage banks from keeping money off-shore than was necessary.

“It’s a submission we have put to Government but it has not been accepted as yet but we will continue to put such ideas so that we cap the monies that are being kept outside,” he said.

Mr Pasi, however, said it was important that the industries be revived to reduce the import bill.

University of Zimbabwe lecturer Professor Ashok Chakravarti and Reserve Bank of Zimbabwe Deputy Governor Mr Kupukile Mlambo told participants at a Sapes Trust policy dialogue on the liquidity crisis last week that lax rules were costing Zimbabwe approximately US$3 billion annually and called for urgent measures to address the situation.

They said Zimbabwe had become a cheap source of US dollars for the region due to its porous regulations.

Source : The Herald