Harare (New Ziana) –All revenue that government Ministries and departments were retaining from fines and user fees will now be remitted to Treasury starting from January 1 next year, Finance and Economic Development Minister Prof Mthuli Ncube has said.
The development is part of on-going reforms to enhance effective control, transparency and accountability over public funds.
Most of the Retention Funds in Zimbabwe were created during the hyperinflationary era to allow government departments to retain part of their revenue to fund critical operations.
Departments that were allowed to retain funds from fines and user charges included the Zimbabwe Republic Police, ZINARA, the Environmental Management Agency, the Judicial Service Commission and the Registrar General.
During that period, a slightest delay in releasing funds from the Treasury would significantly compromise government operations and service delivery due to the rapid loss of value for money as inflation reached a record 500 billion percent.
Reports of lack of transparency in the use of the retained funds however became a cause for concern leading Treasury to direct all government departments which collected and retained them to open accounts with the Central Bank with effect from January 31, 2016 to enhance transparency and accountability.
While all the concerned departments complied with the directive that did not address the issue of abuse of funds.
To enhance retention funds accountability and transparency and to comply with best practices, Retention Funds were expected to wind up in 2020, and be part of the Consolidated Revenue Fund to Treasury beginning the 2021 Fiscal Year.
Ministries and departments were therefore directed to ensure that procedures to wind up Retention Funds were implemented by December 31 last year with the income streams being directed to the Consolidated Revenue Fund with effect from January this year.
Treasury issued Circular Number 9 of 2020 on November 17, 2020 to facilitate the implementation process.