HomeLocal NewsZimra intensifies tax crackdown

Zimra intensifies tax crackdown

THE Zimbabwe Revenue Authority (Zimra) has intensified raids on companies and individuals amid ongoing lifestyle audits targeting top business executives and Zimra officials as Treasury piles pressure on the country’s tax collector to boost sagging revenue inflows.

By Wongai Zhangazha

Government, for the past months, has been struggling to pay its 550 000-strong public service salaries on time, forcing Finance minister Patrick Chinamasa to stagger salaries. This in turn has put intense pressure on President Robert Mugabe’s administration which is facing growing dissent due to the underperforming economy.

While the country is going through a potracted rough economic patch as evidenced by job losses and company closures, the tax authority says levels of non-compliance remains high due to weakening commodity prices, low agriculture output, company closures and scaling down of operations.

Zimra missed the government’s revenue collection target by 6% in the six months to June on the back of a weakening economy.

Business executives who spoke to the Zimbabwe Independent this week said Zimra is currently carrying out onsite inspections at companies checking Pay-As-You-Earn records as well as documents on Value-Added Tax (Vat).

“There has been a massive drive by Zimra officials to collect tax; there have been asking for any document they deem necessary in their investigations to see whether companies are complying. Some have even gone to the extent of asking security guards what type of cars the company bosses are driving,” said an executive who requested anonymity.

Zimra chairperson Willia Bonyongwe confirmed to this newspaper on Tuesday that Zimra was on a massive drive to collect tax.

Bonyongwe said: “l’m not aware about that (Zimra officials asking security guards) and surely they can’t be asking security guards. You say could it be that Zimra is on a massive drive to collect tax? Yes, collecting revenue is our mandate, to collect all tax revenue fully. So, yes, we are across the board increasing compliance by all taxpayers for all tax heads and to ensure that all tax is paid fully and on time. We are plugging all loopholes and are investing in ICT for efficiency and effectiveness. If people have problems, they can report at Zimra’s head office.”

On the lifestyle audit, Bonyongwe said it was an ongoing process which will see Zimra officials being audited.

“Lifestyle audits are ongoing and people might not be aware of them because we don’t publicise it and those who are audited usually don’t talk about it. It’s only once in a while you get someone going public and we will continue.

The important thing is we will do lifestyle audits based on best practice that is normal risk profiling and this will include Zimra staff. We want to use Rwanda as an example, which has a very serious monitoring system,” said Bonyongwe.

Bonyongwe said Zimra was speeding up the automation process, connecting in real-time fiscal devices which were installed at companies from 2011 linking them to Zimra servers. This process is expected to be finalised by September 2016.

She said the roll-out of the Tax Management System (TMS) has gained momentum with many companies being linked directly to the TMS devices, or having their servers directly linked to Zimra.

“We noticed that there has been a lot of under declaration by individuals and companies that has been going on. However, it is still early to determine how much Zimra has lost in these under declarations because we are still compiling data and a lot of reconciliation is still being worked on,” she said.

Commenting on the latest announcement by Zimra calling for people who imported vehicles between January 2014 and June 2016 to check if they were lawfully cleared, Bonyongwe said it was early to determine whether it was a success or not.

“We have 210 luxury cars which were found, through an audit, to have been cleared irregularly, that is, grossly undervalued. Zimra is following up on that formally because we have all the details. The audit has been widened to include more agents and that is ongoing. The public notice was to make people, especially those who imported cars through import agents or who bought from the car dealers, that some of the cars were not cleared properly. While some people are coming forward it is still early days to say it’s a success or not,” Bonyongwe said.

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