THREE Zimbabwe Revenue Authority (Zimra) officials allegedly connived with Falcon Security Services directors to issue fake tax clearance certificates to the company.
FONT face=”Verdana, Arial, Helvetica, sans-serif”>The three officials, whose identities have not been revealed, allegedly issued a fake tax clearance certificate licence number 2776 of 91 on February 9 this year to Falcon.
Investigations by businessdigest revealed that Falcon Security Services has not paid tax since 2003 and owes Zimra $630 million in outstanding corporate tax, value added tax (VAT) and Pay As You Earn (PAYE), it is alleged.
Zimra confirmed this week that it was investigating the matter.
“As Zimra we are very concerned about this allegation and are currently investigating the matter,” Zimra public relations officer, Priscilla Sadomba, said in a written response on Tuesday. She however could not reveal more information, citing client confidentiality.
She said: “The authority is bound by secrecy provisions which prohibit us from divulging confidential information on a client to a third party.”
She however warned: “Companies that are found to have registered fraudulently will be prosecuted to the fullest extent of the law.”
Falcon is owned by Neston Madzika who also owns Doves — once a major funeral services firm that is now experiencing acute financial problems.
Contacted for comment, Madzika claimed that he sold Falcon to management, but documents show that the transaction was reversed.
Madzika reversed the management buyout on December 20 2004, according to a letter to management.
“We refer to your letter of September 28 2004 wherein we agreed (subject to your performance) to a structure whereby you and your management team would acquire 100% of the equity of Falcon Security Services in exchange for monthly payments of $10 million for three years,” Madzika wrote to the chairman of Falcon management.
“It is clear that you failed to pay at all. Please be advised that we have revoked this offer with immediate effect, and we are only prepared to pursue any other discussions after you submit proof of your ability to pay,” said Madzika.
Sources within Falcon said the recent tax clearance certificate was issued illegally.
“The company was unable to renew its licence since 2002 as it has accrued $630 million in taxes, which include PAYE contributions, corporate tax and VAT,” said a source.
“The recent tax clearance certificate from Zimra was issued on February 9 2005 under licence number 2776 of 91 giving Falcon Security Services the mandate to operate,” the source said.
However, Falcon managing director Lovemore Nyausopo insisted that the tax-clearance certificate was genuine.