HomeBusiness DigestCross-border traders find new ways to evade duty

Cross-border traders find new ways to evade duty

ONE of the founding fathers of the United States of America, Benjamin Franklin, observed that: “In this world nothing can be said to be certain, except death and taxes.”

Taurai Mangudhla

Other novelists and opinion leaders were to later shorten and improve the saying to “sure as death and taxes” implying one can neither escape death nor paying taxes.

It seems Franklin was spot-on, but people will do the best they can to proking life by eating right and seeking the best medical care. They will also come up with ways to evade tax.

As such, tax collectors have devised ways to ensure they collect as much as possible from the general populace. One such example in taxation history, which dates as far back in the annals of history, is during the various reins of the Egyptian Pharaohs tax collectors who were known as scribes.


Taxation literature suggests the scribes imposed a tax on cooking oil and to ensure that citizens paid the cooking oil tax, scribes would audit households to ensure that appropriate amounts of cooking oil were consumed and that citizens were not using residue from cooking processes as a substitute for the taxed oil.

Even scriptural history suggests tax collectors used various methods to collect revenues for the Roman Empire in order to fund construction and maintenance of good infrastructure, the army and the welfare of the ruling elite. One sure thing was that the tax collectors were disliked by many and treated much in the same way as crooks because they would even use extortive tactics to collect extra money which they would keep for themselves.

The same prevails in modern-day Zimbabwe where taxpayers and tax collectors have learnt to have a symbiotic relationship which benefits both parties.

Taxpayers have learnt to avoid the collector by whatever means including devising new ways of either evading or avoiding taxes, as witnessed during a bus trip from South Africa’s Musina border town to Harare.

What could have been a one-hour stop on the Zimbabwe-side of the Beitbridge Border over the weekend took six hours due to customs delays.

Passengers aboard a local bus took less than 30 minutes to get their passports stamped for exit from South Africa, much to their delight as it usually takes longer to get processed by South African immigration officials.

On the Zimbabwe side, there was equally quick service at the immigration department and everyone was ready to deal with the customs officials, of course, after hiding a few items on the bus and conniving with other passengers who had less items to declare goods on their behalf.

Despite there being about four buses at 1pm, waiting to be inspected by customs officials, it took more than an hour for them to be attended to. This resulted in the queue growing longer after the arrival of more buses that were in transit. Buses in transit get priority at customs.

By 5pm, the bus had been inspected and a few individuals who had not declared all their goods or refused to pay adequately for the customs officials to look the other way were simply ordered to pay their duties.

The process took nearly three hours. By 7.30pm the bus was off to Harare, but made a brief stop a few metres from the border exit at a police check point.

After the first police road block, a police patrol vehicle stopped the bus barely 10km from the border.

They were road blocks along the way and the bus was stopped at every point. The conductor routinely rushed for a quick chat with the police officers and sometimes exchanged what seemed to be US dollar notes before getting the green light to proceed.

About 150km from Masvingo, a Zimbabwe Revenue Authority (Zimra) truck stopped the bus near Ngundu around midnight.

Passengers, who were deep in slumber, woke up to a barking male voice ordering everyone to produce their customs declaration forms.

The official, clad in a Zimra uniform and a reflective vest, paced half way into the bus before he went out to have a chat with the conductor.

Other Zimra officials, who were accompanied by the police, ordered the conductor to open the luggage compartments on the bus.

“Whose refrigerator is this? Who bought all these drinks and tinned beans?” demanded the Zimra official before owners of the items walked out of the bus to produce their customs receipts and negotiate their way out of penalties for those had.

After about 20 minutes of silence, owners of the items in question walked back into the bus with long faces.

“Ladies and gentleman, we can avoid going through each and every item on this bus by paying R600 to these men, it’s all they have demanded and I think we can pay between R10 and R20 each to raise this money so that we don’t face any more delays.”

A loquacious middle-aged woman immediately assumed the role of group leader and started collecting R20 or US$2 from every passenger on the bus before she handed it to the conductor who in turn gave the money to the Zimra officials before the bus was allowed to proceed.

Such has become the norm on Zimbabwe’s highways as thousands of cross-border traders under-declare duty daily, prejudicing Treasury billions of dollars in potential revenues every year. Tax evasion by cross boarder traders heightened after government cut travelers rebate from US$300 to US$200 late 2015.

Individuals together with companies have been evading taxes to a point that has been a cause for concern in government. Large companies, according to a source in government, are finding ways to evade taxes by using manual systems that are difficult to audit.

As recently reported by businessdigest, government is working on a cocktail of fiscal and monetary policy interventions to compel companies to pay taxes amid heightened concerns that evasion and avoidance of levies by corporates has bled the economy into its current crisis.

High-ranking government officials saidFinance minister Patrick Chinamasa was concluding an exercise meant to introduce punitive measures, through the fiscal policy, to tax offenders early this year as part of efforts to discourage tax offences at a time government revenues continue to dwindle.

Fiscal tools, said a top official in the Treasury chief’s office, will include measures to improve tax collection from the informal sector “bearing in mind that the country’s economy is getting more and more informalised each day”.

Accelerated de-industrialisation has led to the rapid growth of the informal sector.

The government, added the source, has also tasked Reserve Bank of Zimbabwe governor John Mangudya to come up with measures to improve tax collections.

Mangudya is expected to present his monetary policy later this week.

This comes as Zimra figures for the third quarter of 2015 show a country in dire straits with net collections of US$878,22 million, which are 8,9% below the targeted revenue of US$964 million.

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