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Zimbabwean Government Taxed Over Levying Duties in Hard Currency

A new regulation issued by the Zimbabwean government requiring import duties on vehicles and other luxury goods to be paid in hard currency is drawing criticism.

Experts say it runs counter to the national constitution which says the Zimbabwe dollar is legal tender for all purposes. Economists say the new rule, which took effect Friday, signals government desperation to bolster official foreign exchange receipts.

Economist Godfrey Kanyenze of the Labor and Economic Development Research Institute in Harare said the government needs to devalue its currency again, noting that it is ironic for Harare to trumpet its sovereignty when it demands that local taxes be paid in British pounds, U.S. dollars or South African rand.

Economist John Robertson told Studio reporter Carole Gombakomba of VOA's Studio 7 for Zimbabwe that Harare has penalized itself with an unrealistic exchange rate.

More reports from VOA's Studio 7 for Zimbabwe...