ZIMBABWE Revenue Authority (Zimra) is in the eye of a storm amid accusations companies it shortlisted to sell fiscal gadgets are charging exorbitant and inflated prices for devices which can be sourced cheaper on the international market.
By Fidelity Mhlanga
This comes as it emerged this week that companies are incensed by the prices which Zimra’s approved suppliers are charging for the fiscalised electronic registers.
Some of the approved suppliers are charging as much as US$1 700 for the gadgets. According to a Chinese and world’s biggest online commerce company that provides consumer-to-consumer, business-to-consumer and business-to-business sales services, alibaba.com, a tax cash register costs US$200 per unit.
The exorbitant price being charged for the gadgets is notwithstanding a blanket duty cancelation on the devices.
According to Zimra, with effect from October 1 2011 in terms of Statutory Instrument (S1) 104 of 2010 as amended by SI 99 which was gazetted on August 1 2011, all eligible registered operators will therefore be required to commence recording of transactions using fiscalised devices.
Zimra advised clients that with effect from October 2011, all value-added tax registered operators under category C whose annual value of taxable supplies exceeds US$240 000 were required to record transactions electronically.
Companies are compelled to acquire the device. Failure to comply with the requirement to use fiscalised electronic devices for the recording of all business transactions is an offence and renders the operator liable to a fine or imprisonment.
“It’s daylight robbery. The companies which are supposed to issue the gadgets don’t have them. Why should we pay US$1 700 for something which is not there?” a source queried.
“The price of these devices is just too high.”
Although measures have been put in place to mitigate the cost of acquiring the devices through a duty rebate on the importation of approved fiscalised devices by approved suppliers, the gadgets are being sold to local companies at an exorbitant price.
Fiscalised gadgets, are electronic gadgets which contain a fiscal memory. These are fiscalised electronic registers — also referred to as electronic tax registers (ETRs), fiscalised printers and electronic signature devices (ESDs).
According to Zimra, VAT-registered retail operators who meet the stipulated threshold are required for the purposes of recording their taxable transactions to use a fiscalised electronic register or non-fiscalised register together with a fiscal memory device.
Big companies as well as small to medium enterprises are also up in arms against this as they feel the cost of the device is too high.
Other registered operators who are not retail operators are required to use an electronic signature or a fiscalised electronic register or non-fiscalised electronic register together with a fiscal memory device.
However, operators can claim 50% of the cost of acquisition of the fiscalised devices against output tax in terms of section 15(3) of the VAT Act chapter 23:12.
The local supply of the fiscalised electronic registers and fiscal memory devices by approved suppliers to registered operators is zero rated for VAT purposes.
Companies are also concerned about suppliers’ capacity to deliver these gadgets as the majority of them are stocked out.
According to Zimra’s public notice number 14 of 2011 listed device suppliers are Micro Warehouse Private Ltd, Transcation Automation Services Ltd, Burco Technologies, Radius Technologies, Radius solutions Private Ltd, Rumikon Computers, Axis Solutions, Global horizons, Document Support Centre, Arkmate Private Ltd and First Computers.
Quizzed on whether the gadgets were available, one of the suppliers known as Axis Solutions said it did not have them in stock.
“We had them but they were finished. We expected to have them in the first week of January but we got delayed due to foreign payment delays,” an employee at the company said.
Another supplier, Global Horizons, confirmed it did not have the ESD devices in stock.
“Zimra need some adjustment to the electronic devices for them to meet their requirements so we are telling our suppliers to adjust. I think we will have them by mid-February. We are selling the ESD for US$1 700,” an official at the company said.
Contacted for comment, Zimra board secretary and director of Legal and Corporate Services Florence Jambwa said: “Approved suppliers of fiscal devices have been approached by a number of companies and some of these VAT-registered companies have either paid deposits or made full payment for their fiscal devices. The suppliers of fiscal gadgets are in the process of procuring the devices and delivery is expected in late January to early February 2017.”
“In terms of the law, clients can claim 50 % of the cost of acquiring the devices as Input Tax on their Value Added Tax (VAT) returns and the balance of 50% is claimable as Special Initial Allowance in terms of the Income Tax Act (Chapter 23:06). In addition, no Customs Duty or VAT is payable on the importation of fiscal devices, and no VAT is charged on the sale of the gadgets on the local market. All these incentives are meant to make the fiscal devices affordable for the success of the Fiscalisation Project.”
Jambwa said efforts are currently underway to increase the number of suppliers of fiscal devices on the market to improve the supply of the gadgets which will result in the reduction of prices through competition.
In the 2017 National Budget statement, government announced the extension of the Fiscalisation Project to cover all VAT-registered clients with effect from January 1 2017.
In his budget statement Finance minister Patrick Chinamasa said government, which introduced the fiscalisation programme in 2010 to plug loopholes in the VAT system, must acquire updated devices because most of the devices approved at the commencement of the fiscalisation programme are now outdated.
Chinamasa proposed to authorise suppliers of fiscalised devices to procure advanced fiscal devices, saying only four out of the 10 companies licenced to supply fiscalised devices are operational.