THE Zimbabwe Revenue Authority (Zimra) has been in the news after Commissioner-General Gershem Pasi and five senior executive managers were sent on paid leave to pave way for investigations into an alleged car importation scam. All the while, revenue collections continue on a downward spiral as stated by board chairperson Willia Bonyongwe in her performance report for the first quarter of 2016. Zimbabwe Independent senior reporter Wongai Zhangazha (WZ) this week caught up with Bonyongwe (WB) to discuss these issues as well as the revenue agency’s anti-corruption drive among other subjects. Below are excerpts of the interview:
WZ: Zimra recently introduced the Anti-Corruption Hotline. How has the public reacted to the move and how many tip-offs have been received since then?
WB: The hotline was first introduced to Zimra staff and subsequently opened to the public. We are enthused by the response so far and quite happy with the quality of the reports. Most of them are very precise and easy to follow up. I am not sure how many reports yet, but quite significant, because this thing is done secretly; it’s very difficult to quantify exactly.
WZ: To what extent has corruption affected Zimra’s revenue collection and besides the hotline, what other measures has Zimra introduced to combat graft?
WB: In my view eliminating corruption could easily increase revenues three-fold all things being equal. Automation will eliminate a great deal of the corruption. It will be difficult to declare partial revenues.
Our system will also bring onto the tax net many people who are currently underground. However, we know that the magnitude (of the problem) is very significant with the state getting less than half what’s due to it.
For example, the current case in the courts where the Zimra executives’ cars were supposed to pay something like US$47 000, but paid only about US$14 000; that is almost a 70% under-declaration. We have all heard stories where, say a person was asked to pay US$8 000, but ended up paying US$2 000 of which the state gets US$1 000 or less.
WZ: As you reported in your revenue performance report for the first quarter of 2016, revenue collection is continuing to dwindle. What strategies has Zimra put in place to increase collections and are the plans feasible in an environment where companies are closing or downsizing?
WB: Zimra is plugging leakages arising from transit fraud and smuggling through the installation of a cargo tracking system. Automation will reduce the under-declarations and bring in more people into the net through information captured in that tax management system. We are also moving to weed out corrupt elements out of the entire system.
WZ: Some critics believe the revenue body has contributed to company closures and job losses by garnishing the accounts of struggling companies or being too aggressive in the collection of tax. For example, by forcing companies to come up with unsustainable payment plans which lead to their collapse. What is your comment?
WB: I am not so sure how many cases they are but in the past I have heard the Commissioner-General (Pasi) challenge people to bring proof of that. What I can assure you is that there is no such policy or else we would not be carrying such a huge debt on our books. There has to be a balance between us carrying out our mandate and the public meeting their tax obligations.
WZ: There have been reports in the press that Zimra will soon launch lifestyle audits. When are the lifestyle audits expected to start and what has motivated the move?
WB: Lifestyle audits have always been there and are not peculiar to Zimra, but other revenue authorities the world over also do these audits. It’s only that some of those audited may keep quiet, whilst others may share with the public. The aim should be to make it inclusive not target certain groups.
WZ: The public has expressed concern that Zimra is likely to target small fish and leave out the big fish such as the political elite and senior civil servants, including security service chiefs. Who will be targeted under the lifestyle audit and are there any sacred cows?
WB: Tax collection is not selective. Zimra implements government taxation policy. To the extent that the policy is impartial, the tax collector will also be impartial. Like I said, this has been ongoing and has been inclusive. We will neither target nor exclude any group of people.
WZ: Can you disclose some of the high-profile people that have had their lifestyles audited by Zimra?
WB: No revenue authority would give you such confidential information anywhere in the world. Besides, the board is not operational and wouldn’t know such operational details. We only know the policy.
WZ: We understand that the five executive managers at Zimra who were suspended were granted loans to buy cars without the approval of the board. However, there are claims that the approval was from a board resolution of 2009.
Can you explain what these allegations are?
WB: First of all, we sent the Commissioner-General and the other executives on paid leave and not suspension in order to investigate the loans and importation and clearance of the vehicles of the five executives.
We have not suspended anyone yet. Like I said, we are yet to find out after the audit the full details regarding the loans, importation and clearance of these vehicles.
This is why we issued a press release. I am therefore not yet in a position to tell you much right now. But I hope you are not implying that because of a resolution in 2009, there are no corporate governance procedures to follow in 2016.
WZ: How was the Zimra car scam unearthed?
WB: The board was first informed by a whistleblower in February. The audit will provide the board with all the information we require, as you know corporate governance allows us to get expert advice if we feel it’s necessary to understand any aspect of the authority.
WZ: What is the position on the registration of Commissioner General Pasi’s Land Cruiser? Was it undervalued?
WB: I have no comment on the car you say is Commissioner-General Pasi’s because I have actually been advised that that particular car was bought in 2014 from Toyota Zimbabwe and is registered in Zimra’s name. I am not sure if it’s the one that was involved in the accident. You could check details with police?