Zimbabwe tax agency says bond notes exacerbating cash crunch

Zimbabwe's revenue collection agency has said that the planned introduction of bond notes has caused uncertainty and exacerbated the cash crunch in the country as people hold on to their dollars.

In a commentary accompanying revenue data for the third quarter of 2016, Zimbabwe Revenue Authority (ZIMRA) chairperson Willia Bonyongwe said last Friday that there was public skepticism around the bond notes.

"The imminent advent of the bond notes has brought some uncertainty into the economy, and this is exacerbating the existing liquidity challenges because everyone wants to keep their U.S. dollar cash," said Bonyongwe.

Zimbabwe has been facing cash shortages since the beginning of this year and the Reserve Bank of Zimbabwe plans to introduce bond notes in November to ease the shortages.

The planned move, however, has raised fears that it could be a ploy by government to re-introduce the Zimbabwe dollar which was abandoned in 2009 due to hyperinflation.

Zimbabwe has since 2009 been using a basket of multi-currencies, although the U.S. dollar has become the main circulating currency.

On revenue collection for the period, Bonyongwe said the agency had surpassed its gross revenue target by 0.22 percent after collecting 919.91 million dollars.

She said a number of measures instituted by the agency since beginning of the year to curb corruption and increase tax compliance had made a positive impact on revenue performance during the third quarter.

ZIMRA in May suspended its chief and several other senior executives after they were implicated in a vehicle importation scam. Investigations into the matter are still ongoing. Endit