HomeBusiness DigestZimra tug-of-war intensifies

Zimra tug-of-war intensifies

Shakeman Mugari

THE struggle for control of the Zimbabwe Revenue Authority (Zimra) has intensified with revelations this week that Finance minister Samuel Mumbengegwi ha

s virtually taken over the authority’s key operations.

Mumbengegwi has over the past three months moved swiftly to take-over Zimra commissioner general, Geshom Pasi’s responsibilities and consolidate his grip on the authority’s affairs.

Mumbengegwi’s plan is to transform Zimra into a government department under the Finance ministry as it was six years ago. Zimra came out of the transformation of the merger of department of Taxes and the department of Customs and Excise in September 2001.

Mumbengegwi has since directed that all Zimra’s accounts be put under his control. Mumbengegwi last month took over Zimra’s salaries and Value Added Tax refund accounts held with the Commercial Bank of Zimbabwe. This means that all financial decisions will now be made by Mumbengegwi himself. Mumbengegwi is now also in charge of approving any travel that can be undertaken by senior employees of Zimra.

He will also approve any senior appointment at Zimra.

“Pasi has been emasculated. His role is now almost ceremonial,” said a source close to the issue.

At the moment Zimra can not pay VAT refunds to companies without Mumbengegwi’s approval. Monthly salary payments will also have to be approved by the minister.

Businessdigest understands that the situation has been worsened by the fact that Zimra’s board chairman Gibson Mandishona is siding with Mumbengegwi.

“The board has made it clear that they support the minister,” the source said. Last month Mandishona told a parliamentary portfolio committee that he was in favour of restructuring Zimra arguing that it was top heavy. Mandishona has been fighting Pasi over the proposed restructuring insisting that the authority implements Mumbengegwi’s directive.

Angry letters have been flying between Mumbengegwi and Pasi since August.

Pasi is arguing that Zimra cannot be reduced into a mere department because it was set up by an Act of Parliament which he said made it an autonomous organisation. “Pasi is insisting that restructuring of Zimra will be illegal unless approved by Parliament,” the source said.

Although Zimra’s commissioner-general reports to the ministry, the law states that he is supposed to be in charge of the authority’s operations, personnel appointments and approve salaries structures in consultation with the board of directors.

Zimra has a different salary structure from that of the Finance ministry. It is this independence that Mumbengegwi has set out to destroy since he took over from Herbert Murerwa as the Minister of Finance.

Mumbengegwi is also said to be unhappy with the salary levels at Zimra. He wants to push the package levels in line with the rest of the government departments.

Mumbengegwi’s move has already started causing commotion at Zimra which is currently struggling to pay its salaries and VAT refunds on time. The authority has also been dogged by a serious labour dispute due to Mumbengegwi’s delays in approving a salary review.

The source said Mumbengegwi tried last month to fire Pasi on the basis that the rift between them made it impossible for Zimra to operate effectively. The minister is understood to have said Pasi was ignoring government directives. He cited Pasi’s reluctance to implement government’s directive compelling vehicle importers to pay duty in foreign currency. Pasi had initially argued that Zimra’s legal experts were of the view that the regulations would not stand their ground if challenged in a court of law.

The move to fire Pasi however failed because his appointment was approved by Murerwa before he left the ministry.

Murerwa approved Pasi to be the commissioner general for another five years starting from September this year. Firing Pasi would be costly for the government which will have to buy out his contract.

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