GOVERNMENT has blocked a move by Harare City Council (HCC) to start billing its clients in United States dollars, with Finance ministry secretary George Guvamatanga describing the proposal as unlawful.
Council recently gave notice that it would be charging its services in foreign currency with effect from July 1, 2023, as part of measures to preserve value for money and hedge against inflation.
“The need to preserve value against rate losses has necessitated this move. City of Harare thanks its valued residents for the support in funding service delivery through payment of rates and other services,” the city council said.
The currency’s decline has been driven by rising inflation, foreign currency shortages and lack of confidence in government’s economic policies.
However, in a letter dated June 30, Guvamatanga said the move by HCC violated Statutory Instrument (SI) 142 of 2019.
The SI prohibits the use of foreign currency for domestic transactions, except if provided for by the law or if exempted in terms of the Exchange Control Regulations.
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“Under this, in March 2020, the government published SI 85 of 2020 which, in section 2(2) provides that any person with free funds may elect to pay for goods and services chargeable in Zimbabwe dollars, in foreign currency using his or her free funds at the ruling rate on the date of payment.
“The payment, in foreign currency by any person paying for goods and services should be at his/her option unless otherwise exempted and cannot be compelled to pay in foreign currency,” Guvamatanga said.
He ordered Harare City Council to withdraw its notice.
“The charging and billing in US dollar by the City of Harare or any local authority is unlawful and contravenes the above-cited laws. As the city council falls under your purview, may you ensure that the City of Harare withdraws its notice and all local authorities comply with relevant laws. Be guided accordingly,” he added.