FORMER Zimbabwe Revenue Authority (Zimra) commissioner-general Gershem Pasi, who has been embroiled in a bruising legal battle with his employer of 16 years, resigned last week. Pasi was suspended last year in May to allow for investigations sanctioned by the Zimra board, chaired by Willia Bonyongwe after a whistle-blower’s report on irregularities in the importation of executive cars. HLB Chartered Accountants carried out an audit, which raised issues of fraud, poor corporate governance, tax evasion and corruption. Zimbabwe Independent deputy editor Faith Zaba (FZ) on Monday spoke to Pasi (GP) several issues including corruption at Zimra. Below are excerpts of Part Two of the interview focusing on his 16 years of service at the revenue collection authority:
FZ: Can you take us through your years at Zimra and your possible achievements and challenges over the years?
GP: As you may recall, before the formation of Zimra I was commissioner of taxes of the then department of taxes, which I served as commissioner from 1996 to April 2001. At that juncture, I was then fortunate enough to apply and be accepted to be the inaugural commissioner-general of the Zimbabwe Revenue Authority. I was employed in that capacity in May 2001 and charged with setting up structures and operationalising the Zimbabwe Revenue Authority Act. I was given six months to do it. I am happy to say as records show, we did it in three months. By the 1st of September 2001 we were up and running as a revenue authority. There were a lot of exciting challenges because we needed to give the authority the capacity to do the work that needed to be done. Coincidentally the formation of the revenue authority coincided with the intensification of the international economic sanctions on the country. So it meant that we were really thrown into the deep end where overnight Zimra was the only meaningful source of revenue for government and that was to remain so up to now. So it was very important at that stage for us to hit the ground running so to speak and to be creative to make sure that we set up the systems and procedures on the move so to speak. We were not given a honeymoon to say you are still at the incubation stage but we had to deliver from day one.
FZ: So what systems did you put in place?
GP: The major system we realised that we needed to put in place was a modern and integrated computerised system, which I am happy to say, we did. One hopes that those who will be taking over can now build on that. We put in other modern facilities. We introduced cargo scanning at our ports of entry. We worked through the Office of the President and Cabinet. We managed to take advantage of facilities given to government by the Chinese companies. One of which are the scanners, equipment, computers, like the Avic International, which is a Chinese company. This was government to government. It is sad that now you read in the press that I signed ridiculous prices. That was negotiated at government level. It was not an individual thing or just for Zimra to do what they wanted bearing in mind that we were introduced to this company by the Office of the President and Cabinet under the government to government co-operation. We were working with treasury as well.
FZ: What impact did the sanctions have on your revenue collection efforts and also the economic meltdown, which led to several companies closing shop? What did you have to do to maximise your revenue collection efforts since you had become government’s only source of revenue?
GP: We looked at options that the cake was shrinking so the major way we could continue to bring revenue was to be efficient, hence the systems we had. The bringing together of customs and taxes as a single unit under the authority meant that we would be efficient in sharing resources, like your ICT systems and you no longer had different departments doing their own thing. We gained a lot of efficiencies at that perspective. We also sort to introduce other modern methods for customs of doing our work. I have noted the non-intrusive equipment, which were the scanners. We also introduced the K-9 unit, the sniffer dogs. What people don’t realise is that because of the sanctions, which were put on us, we as a country, there were certain things that we would have drawn on as an authority but because of the sanctions imposed on the country, other units were hamstrung. There were no efficient sniffer dogs in the country. The breeds had been diluted so much. We went into a JV (joint venture) with the Air Force of Zimbabwe where we brought in new breeds of sniffer dogs. We then worked with our counterparts at the air force to train and to start our national sniffer dog breeding programme. That has been going on well. That is why you see more and more of our ports having resident sniffer dogs. Someone bringing in Ambis in the past, we would have to search 100% and now they are trained and you just let them they pick them out. This brings efficiency and your hit-rate becomes higher. And also the issue of giving computers to staff and making sure that we work on computers. In 2014 we launched the e-platform service where our clients could do work from their offices. These were part of the bigger project that we were rolling out.
FZ: With the economic meltdown, several companies were failing to remit to the authority. What did you have to do to ensure that you get what is due to government?
GP: The philosophy that we had, we were becoming efficient with our systems, we were in a position to know the current position for each of our clients. You may recall that over the years I have told our clients to come and talk. I believe as a revenue authority, you need a win-win approach, where you say you owe us so much, you are making so much, which is not what you used to make so let us have a plan which allows you to continue liquidating what you have, meeting current obligations and at the same time allow you to continue with your business. We looked at the behaviour of each client. The debt owed kept on increasing as the economy went deeper and deeper into recession. But it is a question of how you balance. My philosophy has always been to look at the broader economic environment and measure the impact of your decision on the whole economy.
FZ: Were you able to reduce the debts?
GP: It was going up and down because mind you when you analysed the money owed to government and the entity which owed money, most of those entities were owed by government for services given to the general government. While the law is very clear that there may not be any write off between what is owed to the rest of government and what is owed to taxes, you also as a revenue administrator, you need to be sensitive. For instance a company has sold so much and in terms of the VAT law, they must pay the VAT within a prescribed time period to government. I was in charge of collecting that. But then they bring their books and you find that they have not been paid for a year or so by their biggest client, who may be parastatals or central government. But the law requires that I penalise them, so that was the catch 22 that I found myself in, trying to find balance. In those cases we would say you pay so much, little by little but we may not charge you penalties because we understand your situation. Some people might then say that company was never charged penalties therefore there is corruption. That is why each time I got a chance to talk about corruption, I would say let us talk about real corruption not perceived corruption. One of the things that we also achieved was the issue of tollgates. You recall that it had been on the list of approved projects for government for a long time and eventually we offered that we could start them off. We did agree that it would be rudimental. We did that and at an appropriate time the Ministry of Transport then took over and we handed over to them. Those are the some of the issues we don’t realise the role that Zimra has played in the overall economic framework.
FZ: There has been a lot of smuggling during your time, how did you try to curb this?
GP: Smuggling like all kinds of corrupt activities is very difficult to deal with without information. We set up a new venture, which is a rapid response unit where if we received information that a truck has entered and is going in such and such place, we quickly dispatch a team. We have had successes in that. We are less than 3 000 staff for customs, taxes and all the duties we carry out across the country. So we couldn’t be everywhere at the same time. Information is important. Some people, who talk about corruption, don’t want to come out in the open because they are part of that corruption and they fear that they will then expose themselves. It is a cancer, we need to fight it.
FZ: When you talk about corruption, Zimra and the police are put at the top as some of the most corrupt units in the country. How did you try to tackle corruption at Zimra?
GP: It is very sad especially for Zimra, which I led up to last week. As the CEO of an organisation, what you are expected to do is put in place measures that curtail, that deal with factual cases which would have been unearthed. If you were to go into records, we caught a lot of people, we took them through disciplinary processes and we fired a lot of people. But you need to be fair and have your facts right. When you get your information, you investigate and when you have the facts at hand you take action. So as a CEO you want to put in place systems in place and to be able to deal with any issues that come. In all fairness, we did that under my watch. At institutional level we are doing our beat but it needs to be part of the national programme because people don’t corrupt themselves. People engage in corruption with other people.
FZ: What systems did you put in place to curb corruption?
GP: One of the ways we sought to deal with corruption amongst our midst was to look at conditions of service because if you do not pay your revenue officers a just wage, they pay themselves. One of the tasks that I was charged with when I was made the commissioner-general at inception was to look at conditions of service. We were improving. We were not where we needed to be but we were improving slowly, taking into account the general economic condition of the country. So all the schemes we put in place, we were looking at what it would cost the organisation and the country. We were creative. We came up with some schemes that would not cost that much to the authority, like your loan schemes. People may condemn them because they have not taken time to do the numbers. We did not give people money, we arranged with the banks but you said use the car for work and we have a formula where we compensate you. That is the programme we had started. We have done all management, all executives and were cascading. By the time I was pushed out on leave we just had the board approval for supervisors. We also had a scheme for housing. We looked at Zimbabwe’s situation and said what are the three primary concerns at the moment – food on the table, housing and transport because we don’t have public transport. And we said if we can give somebody a decent wage so that they can buy food, a decent vehicle and we assist them in getting a stand or a house, we will have loyalty and those people will not indulge in corruption because they will have more to lose. But with corruption you will still have, I always use the standard distribution curve where you will have 5-10% who even if they have nothing to eat, they will not be corrupt. You have your 10% who even if you gave them billions of dollars, they will still be corrupt. And you have 80-90% in the middle, those are the people you want to work with. These are the people if you give them those incentives, they will change the predisposition away from corruption. That is the philosophy I applied and I think if we applied it at national level to all our institutional frameworks we will have minimal corruption. If that person doesn’t even have enough bus fare to come to work , you need to ask yourself that that person is coming to work every day and you are paying him this little, how are they making up. So corruption is not just talk, you need really to be just pragmatic. You need to ask why are they are coming to work for you and if the economy was to improve would they want to remain with you or they will go elsewhere. These are the issues that should be interrogated and be part of the anti-corruption drive.