Bulawayo Forex Rebates Approved – Bulawayo24 News

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Residents of BULAWAYO will get a 50% discount to settle their fares in foreign currencies, while industries will get a 30% discount after councilors approve the resolution which initially met with resistance from board leadership, claiming it violated the Reserve Bank of Zimbabwe’s foreign exchange regulations.

Councilors in June offered to offer residents willing to pay their bills in foreign currency a 50% discount. This was after a public outcry over a resolution in which the local authority ordered it to peg its foreign currency bills, with residents able to pay rates in local currency using the prevailing auction rate on the day of billing.

However, the decision to discount foreign currency was met with stiff resistance from management who made it clear that they would not implement the resolution as it contravened the regulations of the Reserve Bank of Zimbabwe. .

However, according to the council’s latest report, councilors apparently had the final say in passing the resolution and implementing a 30% discount for industries that were willing to pay their bills in foreign currencies. This did not hold up, with town clerk Mr Christopher Dube warning councilors that the move was illegal.

“The Registrar explained that based on Statutory Instrument 127 of Schedule 2021 (Section 11) Council could not offer discounts to people paying in foreign currency. This was further emphasized by the Minister for Finance and Economic Development while announcing additional measures to stabilize the exchange rate and inflation control were considered to ratify management’s decision to peg fares to the US dollar and that while billing would be in Zimbabwean dollars, payments could be made both in local currency or in foreign currencies at the prevailing interbank exchange rate,” reads the report.

Councilors nevertheless rejected Mr Dube’s advice noting that the local authority needed foreign currency, hence the need for them to give incentives to encourage consumers to pay in foreign currency.

“Councillor Edwin Ndlovu noted that the council needed foreign currency to continue service delivery. The government had already started charging for some of its services in foreign currency. Civil servants received part of their salaries in US dollars. would be prudent for the council to offer 50% reduction for residents who pay in foreign currency Councilors Lilian Mlilo, Silas Chigora and Felix Mhaka agree to support the 50% reduction in foreign currency payments for domestic debts “, we read in the report.

Councilors further noted that residents were in favor of the discounts, so it was highly likely payments would improve once the move is implemented.

“Clr Pilate Moyo was also concerned about the local currency fee if reduced when converted to foreign currency. Clr Donaldson Mabuto supported the 50% reduction and encouraged residents to pay their bills.

Deputy Mayor Clr Mlandu Ncube observed that council bills showed charges in both local and foreign currencies.
“The council needed foreign currency to acquire consumables and meet labor demands. It was prudent to impose a 50% discount on residents paying in foreign currency,” the report read.

Meanwhile, outlining the impact of the decision, the council’s finance department noted that it would result in losses for the council on accounts with inherited debt balances, where any current payment towards a balance of account with inherited debt denominated in local currency would have lost value in foreign currencies.

“Rates have been set for fair, equitable and reasonable service delivery.

“The reduction in tariffs is correlated with the level of service delivery in a normal economic environment.

“A reduction in tariffs would have to be funded by an increase in tariffs elsewhere or by a new source of funding. Without additional sources of funding, service delivery suffers.

“This is evident in the challenges the council faces in terms of reduced frequency of refuse collection across the city, intermittent water supply, inability to deal with sewers in a timely manner and water-related bursts. water, impassable roads to name a few.

“The current environment of hyper-inflation and depreciating local currency cannot sustain further loss of revenue through rebates,” the report read.

With the indexation of invoices in foreign currencies, the State will be indebted; $563,000, industry and commerce; $3.3 million and domestic debtors will owe $11.7 million.

In proposing the resolution, councilors had said that the council, which owed $5 billion, would prefer to get half the amount in foreign currency and write off the rest of the bill because it would go a long way to improving service delivery.

The local authority announced the decision to index bills in foreign currencies from June 1 to hedge against inflation.

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