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Zimra to intensify tax crackdown

Zimbabwe Revenue Authority (Zimra) is mulling attaching properties of tax defaulters as part of government’s desperate measures to raise the dwindling country’s revenue.

By Fidelity Mhlanga

The country is failing to meet its bloated civil service wage bill, a situation that has resulted in an industrial action over unpaid bonuses.

“In some countries they send tax dodgers to prison and, after serving the sentence, they still pay tax. Zimbabwe has not gone that route but will start attaching property for tax dodgers,” acting Zimra commissioner-general Happias Kuzvinzwa said on Wednesday in the capital.

He pointed out that tax evasion, smuggling, corruption, money laundering, transfer pricing and all forms of illicit behaviour have the undesirable effect of derailing economic development.

Kuzvinzwa said the prevailing harsh economic conditions had also fuelled all these vices, and have resulted in some companies accumulating huge debts.

The country missed its modest 2016 revenue collection target by US$145 million.

The poor performance of the tax head last year was attributed to low profitability and tax evasion by companies, low profitability due to cash shortages, low industrial capacity utilisation, high cost of utilities and insufficient credit lines.

He said base erosion and profit shifting, which refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no tax location, was a major challenge facing the African continent.

Government is planning to spend US$3 billion this year on employment costs, leaving only US$400 million for current operations, capital and social projects.

However, in January Zimra surpassed gross and net revenue targets by over 4% and 3% respectively.

The authority collected gross and net revenue amounting to US$264,79 million and US$262,21 million respectively, against a target of US$254,10 million, which translates to a growth in net revenue of over 13% when compared to the US$232,01 million which was collected during the same period last year. On fiscalisation, Kuzvinzwa said the Ministry of Finance has extended invitations to suppliers of fiscal gadgets in order to improve the availability and affordability of the devices.

“To ensure that the supply of fiscal gadgets is available at affordable prices, the ministry (of Finance of Economic Development) has invited interested parties and the process is ongoing and those that have been shortlisted will be announced very soon to ensure that the competition of supply is high,” he said.

With effect from October 2011, Zimra ordered that 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.

Last month, this paper exposed the exorbitant cost of fiscal gadgets charged by six suppliers. Some of the approved suppliers are charging as much as US$1 700 for the gadget at a time Chinese and the world’s biggest online commerce company that provides consumer-to-consumer, business-to-consumer and business-to-business sales services, alibaba.com, sells a fiscalised gadget at US$200 per unit.

“Fiscalisation has seen improved revenues, especially VAT onlocal sales as clients are finding it difficult to under-declare their sales,” Kuzvinzwa said.

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