Update on Acts, Monetary Policy and Government Gazette

Both Houses of Parliament are Sitting This Week

Finance Act and Appropriation (2019) Act Gazetted

These Acts were published in a Government Gazette Extraordinary dated 20th February:

Finance Act, 2019 (No. 1 of 2019) [link]

Appropriation (2019) Act, 2019 (No. 2 of 2019) [link.

Finance Act

The Bill for this Act went through Parliament as the Finance (No. 3) Bill, 2018.  The dropping of “(No. 3)” from the title of the Act was necessitated by the fact that Parliament did not finally pass the Bill until the Senate approved it on 30th January, making it the first Act of Parliament of 2019.  The Act differs from the original Bill in several other respects, some caused by amendments made by the National Assembly in December and others by editorial correction of errors in the text.  These differences include:

Deletion of clause allowing customs officers to enter and search private residences  This was clause 23 of the Bill.  The Minister of Finance and Economic Development withdrew it after protests from MPs, conceding that the existing powers of customs and officers were adequate.

Deletion of provision for “Unexplained Wealth Orders”   Clause 34 of the original Bill provided for the enactment into permanent law of the temporary regulations controversially enacted by Statutory Instrument [SI] 246/2019 under the Presidential Powers (Temporary Measures) Act on 9th November 2019 – Presidential Powers (Temporary Measures) (Amendment of Money Laundering and Proceeds of Crime Act and Exchange Control Act) Regulations, 2018 [link].  The Minister accepted the deletion of this clause when Hon Biti, correctly, pointed out that it should not have been included in a Money Bill confined to revenue measures [Constitution, Fifth Schedule, paragraph 7].

Note: These temporary regulations are still in force.  They will expire at midnight on 8th May.  If the Government wishes to keep the regulations on the statute book without a break, it will have to get an appropriate Bill through Parliament and gazetted as an Act on or before 8th May.

Effective date of new Standard Scale of Fines – 20th February 2019   The new Standard Scale of Fines introduced by section 27 of the Act will apply only to criminal offences committed on or after Wednesday 20th February 2019 – the day on which the Act was gazetted as law.

Appropriation (2019) Act

The significant change from the original Bill is the increased allocation of funds to Parliament [$145 million, up from $101 million] and a corresponding reduction in the amount of the Unallocated Reserve in the allocation to the Ministry of Finance and Economic Development.

Monetary Policy Statement and

Its Implementation by Statutory Instruments

The Governor of the Reserve Bank delivered the Bank’s belated Monetary Policy Statement [MPS] on Wednesday 20th February.  The full text of the MPS is available on the Veritas website [link].  The necessary legal instruments were said to have been prepared.

Two days later, in a Government Gazette Extraordinary dated 22nd February, two statutory instruments were gazetted to give legal effect to the MPS.  [See under Gazette Extraordinary of 22nd Februarybelow.]

Government Gazettes 20th February to 1st March

Gazette Extraordinary 20th February

Assignment of Acts to Vice-President Chiwenga

SI 22A/2019 –  This SI from the President’s Office lists three Acts for which Vice-President Chiwenga [“the Vice-President responsible for Procurement and Research”] is responsible.  It replaces the list in SI 214/2018.]  The only new item on the list is the Public Entities Corporate Governance Act [link].

New ZIMRA Revenue Board [link]

GN 298B/2019 – This GN is the official notification of the appointment by the Minister of Finance and Economic Development of members of the Board for 3 years from 4th January 2019 to 3rd January 2022. The Ministry’s Permanent Secretary, Mr Guvamatanga, is incorrectly listed as an appointed member; in fact he is an ex officio member and has been since he became Permanent Secretary and will continue as long as he holds that office.  The ZIMRA Commissioner-General is also an ex officio member of the Board, although not listed in the GN [Revenue Authority Act, section 5].

Regular Gazette 22nd February

Labour – Collective bargaining agreements

SI 25/2019 – Commercial Sectors limitations on use of fixed-term contracts, and cost-of-living allowances;

SI 26/2019  – Air Transport Industry housing allowances.  

Local authority by-laws – Ruwa Local Board  Several new sets of by-laws were gazetted:

SI 27/2019 – Dog Licensing

SI 28/2019 – Market

SI 29/2019 – Taxi

SI 30/2019 – Cemeteries

SI 31/2019 – Hawkers and Vendors

Road Traffic – Axle-loading

SI 23/2019 – adds a new paragraph (c) to the list of maximum forces that may exerted on a road surface by a vehicle or train of vehicles.

Customs & Excise

SI 22/2019 – adds another mining location [belonging to Berry Tech Investments] to the long list of mining locations enjoying a 3-year suspension of duty for capital development.

Gazette Extraordinary 22nd February

Implementation of Monetary Policy Statement

SI 32/2019 [link– Exchange Control (Amendment) Regulations, 2019 (No. 6). These regulations inserted a new definition of “currency” into the main Exchange Control Regulations of 1996 under which currency will include not only bond notes and coins, but also the new electronic currency [“RTGS dollar”] created by the related SI 33/2019, mentioned in the next paragraph.  With effect from 22nd February:

SI 33/2019 [link] – Presidential Powers (Temporary Measures) (Amendment of Reserve Bank of Zimbabwe Act and Issue of Real Time Gross Settlement Electronic Dollars (RTGS Dollars)) Regulations, 2019. The objective of the regulations is conveyed by their title, as spelled out in full above.  With effect from 22nd February:

(1) the new electronic currency [the RTGS dollar”] is legal tender,

(2) existing balances expressed in US dollars are deemed to become balances expressed in RTGS dollars [except for balances in FCA nostro accounts],

(3) for accounting and other purposes existing assets and liabilities valued in US dollars are deemed valued in RTGS dollars [again, except for FCA nostro accounts,

(4) Acts of Parliament and statutory instruments referring to amounts  in US dollars must be construed as referring to the same amount in RTGS dollars,

(5) bond notes and coins  continue as legal tender, exchangeable with the RTGS dollar on a one-to-one basis, and

(6) the opening parity rate of 1 US dollar to 1 RTGS dollar will vary as “determined by the rate at which authorised dealers under the Exchange Control Act exchange the RTGS dollar for the US dollar on a willing-seller willing-buyer basis”.   

If these SI 33 temporary measures are to last for more than six months, they need to be confirmed by an Act of Parliament that becomes law before on or before 28th August.  This is the second time the controversial [and, in Veritas’ view, unconstitutional] Mugabe-era Presidential Powers (Temporary Measures) Act has been used in recent months.  [The first is mentioned above under the heading Finance Act above with reference toUnexplained Wealth Orders.]

Gazette Extraordinary of 27th February

Refurbishment of UZ halls of residence

GN 336A/2019 – a last-minute call for tenders for supply and delivery of plumbing, carpentry, electrical and painting materials to refurbish University of Zimbabwe halls of residence, with a closing date 4th March.

Regular Gazette of 1st March

International accounting and auditing standards

SI 41/2019 – the Public Accountants and Auditors (Prescription of International Standards) Regulations, 2019, which list the International Standards adopted and prescribed by the Public Accountants and Auditors Board for the accountancy and audit professions and practice in Zimbabwe.  These standards are not set out in the regulations, but are available for inspection at the Board’s head office in Harare and on its website.

Customs and Excise

SI 39/2019 removes four fabrics from the Second Schedule to the Clothing Manufacturers Rebate regulations.

SI 42/2019 changes the list of suspensions  of duty for capital equipment, spare parts and components for the Beitbridge-Bulawayo Railway company.

Income Tax – Exemptions from Non-residents’ taxes on fees and royalties  The Seventeenth and Nineteenth Schedules to the Income Tax Act provide for withholding taxes on fees and royalties payable to non-residents.  Both Schedules allow the Minister of Finance and Economic Development to grant exemptions from these taxes in respect of specified projects.

SI 38/2019 – specifies the project for construction of Zimbabwe’s new Parliament building, and refers to fees payable to expatriate staff of the Shanghai Construction Group.

SIs 44 and 45 /2019 – specify the project to modernise and expand the Beitbridge Border Post, are in favour of Andalusia Investments (Pvt) Ltd trading as Zimborders, and refer to fees and royalties.

Labour – Collective bargaining agreement

SI 40/2019 records an agreement to increase minimum wages with effect from 1st July 2018 .

Local authority by-laws – Ruwa Local Board

Four more sets of new by-laws from this local board:

SI 34/2019 – Commuter Omnibus Station

SI 35/2019 – Anti-Litter

SI 36/2019 – Public Heath

SI 43/2019 – Advertising

Local authority by-laws – Masvingo Rural District Council

SI 37/2019 – a brief set of by-laws requiring the council’s approval of plans for the erection of a new building, or substantial alteration of an existing building, anywhere in the council area.

Veritas makes every effort to ensure reliable information, but cannot take legal responsibility for information supplied.

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