DIAMOND mining companies operating in the Chiadzwa area of Manicaland are in the line of fire amid revelations that the Zimbabwe Revenue Authority (Zimra) has moved to garnish them to recover a combined total of US$45 million owed in taxes.
Zimra sources this week told the Zimbabwe Independent that the revenue body was under pressure to increase revenue collection in the face of a mounting liquidity crunch which has resulted in the government struggling to pay civil servants’ salaries and fund other programmes like the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset) which requires a whopping US$27 billion to implement.
Zimra sources gave the breakdown of the amounts allegedly owed by the diamond mining companies as follows: Marange US$5 million, Mbada US$22,4 million, DMC US$11 million and ZMDC US$18,3 million.
The National Social Security Authority (Nssa) has also not been spared from Zimra’s aggressive approach to revenue collection.
Zimra refused to comment on the matter citing confidentiality clauses in client matters as contained “in the revenue and other fiscal laws”.
“The Zimbabwe Revenue Authority staff is precluded from divulging taxpayer information to third parties by legal provisions which are contained in the Revenue Authority Act (Chapter 23:11) and other fiscal laws which the authority administers,” wrote Florence Jambwa, director of legal and corporate services in an e-mail response yesterday.
“Doing so will attract a jail term without the option of a fine. I am, therefore, unable to comment or confirm whether the requested information is true or not because the reason is stipulated above. I hope you will find this response useful in the compilation of your article.”
Mbada, which allegedly owes the biggest chunk, has already received two garnishee orders in the past four months, the latest coming on April 2 at the firm’s accounts at BancABC.
Mbada Corporate Services Executive George Manyaya refused to discuss the company’s tax obligations, saying “tax issues are discussed between Zimra and the corporates. They are not discussed with the media”.
However, company sources, who spoke on condition of anonymity for fear of jeopardising on-going discussions with Zimra acknowledged the tax liability, but argued that Mbada, along with other firms, had been paying their taxes in advance after chipping in to assist the government during difficult times by providing cash for civil servants’ salaries.
“Yes we owe Zimra, but US$22,4 million is an exaggeration. We have been making advance payments to the government, bailing them out with cash to pay civil servants’ salaries among other things. All of this was on the understanding that these would be viewed as part fulfilment of our tax obligations and therefore even if we owe, there is no way the figure can be that high,” said the source, adding “we are currently negotiating with Zimra to rectify the issue.”
The official bemoaned this paper’s fixation with negative news about the company querying why it was not “focusing on positive aspects like the fact that we have surpassed the US$1 billion dollar threshold in total gross revenue within four years of operation.”
“We have also contributed US$424 million (41%) towards taxes, dividends and government advances, US$33,9 million (3%) towards corporate social responsibility, US$214 million (21%) as capital expenditure, US$225 million (13%) as direct production related expenditure and US$138 million (22%) as Operational Expenditure,” added the official.
Attempts to obtain comment from Marange proved futile as their telephone went unanswered.
ZMDC refused to comment on the issue despite initial assurances from senior company officials that they would respond to emailed questions.
“The GM (general manager) spoke to the chairman about your questions and they are not going to be commenting,” said ZMDC public relations manager Charity Tambandini in a telephone interview yesterday.
Sources revealed Zimra was targeting to garnish US$20 million from Nssa.
“Nssa was garnished for US$10 million last Friday. In fact they owed US$20 million but Zimra garnished them for half the amount after they repeatedly failed to heed requests to pay up,” said a source at the authority.
Nssa general manager James Matiza promised to respond by email but had not done so by the time of going to press.