On 24 June the government passed Statutory Instrument 142 of 2019 essentially scrapping the Multicurrency regime. However, there were some loopholes which have now been closed by Statutory Instruments 212 and 213 of 2019.
Statutory Instrument 213 deals with the penalties to be faced by those violating the foreign currency provisions that government has passed. These penalties, called civil penalties by the law, are limited to fines only and do not include any jail term although there is the very real chance at some point the government will introduce these.
In fact, it’s not a crime to sell your goods in foreign currency. Rather it is called a civil default. A rather odd choice of words however it shows the government is rather wary of criminalising businesses in an environment where they are already facing tough challenges. It could be just the government is making the point that this is a fundraising exercise on it part.
The RBZ will be in charge of fining people and business found in violation.
Types of penalties
There are two types of penalties. A cumulative penalty is one where the amount of the fine continues to grow each day as long as the business in question is still in violation. For example, if you are caught selling in foreign currency and fined, your fine will grow each day as long as you continue to sell in foreign currency.
A fixed penalty is one whose amount is fixed. Both penalties are only issued as a last resort. The RBZ, the law seems to suggest, has to only issue a civil penalty as a last resort after they have for example warned the offending business and given them guidance on how to comply with the law.
A cumulative penalty shall not exceed $100 ZWL a day. The amount shall accumulate for 90 days which means the maximum payable fine is $9 000 every three months.
For other more serious offences, you might have to pay a cumulative penalty fine and a fixed penalty. The fixed penalty is capped at $6 000 ZWL. For these offences:
- You will pay a maximum fine of $100 for each day you are not in compliance for 90 days plus the fine of $6 000. This gives at total of $15 00 ZWL
- For more serious offences you will pay a Level 6 fine ( currently $1 200) per each day for a maximum of 90 days ($108 000) plus the $6 000 fixed fine i.e. $114 000 ZWL.
Other sections of the law deal with making sure you pay. Simply put if you fail to pay the RBZ will use the courts to sell some of your stuff and make sure they get their fine.
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