ZIMBABWE Revenue Authority (Zimra) Commissioner-General Faith Mazani was appointed in January this year to lead the country’s revenue collector. She joined Zimra from the International Monetary Fund (IMF) Regional Technical Assistance Centre (RTAC) where she served as a tax administration expert/advisor since 2014. Zimbabwe Independent senior reporter Wongai Zhangazha (WZ) this week caught up with Mazani (FM) to discuss her vision for Zimra, the revenue agency’s anti-corruption drive among other issues. Below are excerpts of the interview:
WZ: What are your set objectives as you come in as the new Zimra Commissioner-General?
FM: My major focus is to have a vibrant revenue authority that is client-driven and benchmarks against other revenue authorities for best practice in tax and customs administration. I will intensify strategies to increase revenue collection, curb corruption and reduce the tax debt. Above all, my thrust is to have satisfied clients and motivated staff. I have summarised my vision on four pillars, which I explain:
l People issues: Realising the importance of our staff, I will put strategies in place to capitalise on the skills that we have invested in and to develop skills in line with technological developments. This will entail positioning our staff in line with their areas of expertise;
l Processes: We have invested a lot in information communication technology and other technological assets and we will re-engineer our operational processes in order to derive maximum benefit from the investments we have made and improve our operational efficiencies;
l Partnerships: the thrust that we are taking is to engage as much as possible with clients to encourage a culture of voluntary compliance. I am also looking forward to partnering with our principals, that is the government and other key stakeholders to promote voluntary compliance as well as enhancing sustainable domestic resource mobilisation; and
l Projects: my vision is to place Zimra as a leading revenue administration in the region and beyond. This will entail delivering modernisation projects and programmes that will provide a solid foundation for accelerated growth and technological reforms.
WZ: Zimra seems to be doing well in terms of its revenue collection in this difficult economic situation characterised by company closures. What are the measures that Zimra has implemented to ensure tax compliance?
FM: Zimra has implemented several measures meant to inculcate a culture of voluntary tax compliance in Zimbabwe.
These strategies include education and awareness programmes to empower taxpayers with information pertaining to their rights and obligations under fiscal laws through workshops, seminars, exhibitions and publicity campaigns.
Zimra has re-engineered its operations through client segmentation to give clients a focussed service. The client segmentation approach has resulted in clients being categorised into small, medium, large and informal sector, thereby paying particular attention to their respective needs and circumstances. Clients are also now engaged on a one-on-one basis using the portfolio approach that promotes mutual understanding of clients’ circumstances, to motivate improved compliance levels.
Furthermore, the authority has automated its processes to improve convenience to clients through enabling them to submit tax returns and bills of entry and to apply for tax clearance certificates online.
The authority is also collecting data through fiscalisation and other third-party sources to inform audit and other compliance management activities.
Zimra has also intensified its fight against tax evasion, smuggling, corruption and all forms of underhand dealings as a way of safeguarding revenue. The Electronic Cargo Tracking System, which monitors movement of transit cargo from point of entry to point of exit, has also contributed to curbing transit fraud and facilitating trade.
WZ: What has been the impact of retrenchments, salary cuts and inconsistent salary payments on Zimra performance?
FM: Salary cuts, retrenchments and irregular salary payments by some companies have negatively affected the performance of Pay As You Earn (PAYE). In 2017, revenue collections under PAYE amounted to US$490,01 million, which was 64,22% of the targeted US$763 million, translating to a decline of 33,47% from the US$736,53 million collected in 2016.
WZ: Business leaders and some investors say Zimbabwe has one of the highest tax regimes in the region. Are there any plans to ensure that we are at par with our peers?
FM: The Zimbabwean tax rates are comparable to other countries in the region. For instance, Zimbabwe’s rate of corporate tax of 25% is comparable to Zambia’s 35%, South Africa’s 28% and Nigeria’s 30%. What makes Zimbabwe’s situation unique is the level of non-compliance, which is very high and has an effect of burdening the few that are compliant. This is why strategies to increase compliance are being implemented with a view to achieve an equitable tax system.
WZ: How effective has Zimra been in collecting tax from the informal sector given that our economy is largely informal now?
FM: Strategies to harness the informal sector were embarked on in 2017 through joint workshops with the Ministry of Small and Medium Enterprises (SMEs). A total of 19 000 new clients were registered through this exercise. The contribution from this sector is expected to improve as the businesses grow. Going forward, the authority will intensify engagements and registration of the small and medium enterprises to improve their contribution to the economy.
WZ: How prevalent is smuggling and what has been the impact of that in revenue collections?
FM: Smuggling still poses challenges to revenue collection although Zimra has put in place robust strategies to curb the illegal and underground activity. The authority has introduced non-intrusive inspection systems (scanners) to detect contraband and the Electronic Cargo Tracking System to curb the illegal dumping of transit goods in the country. Borderline patrols and post-importation roadblocks are carried out in collaboration with law enforcement agents to deter smuggling.
WZ: How effective has been the Zimra whistleblowing system?
FM: The whistleblowing system has been quite effective. A lot of information has been brought to the attention of Zimra and has been used to detect cases of tax and duty evasion. Under the facility, any individual who provides specific information which results in the recovery of revenue will be entitled to 10% of the recovered amount.
This is a statutory requirement in terms of the Revenue Authority Act. Zimra encourages people to utilise the system and come forward with information to the Commissioner (Investigations) at Zimra Head Office, ZB Centre, Harare. The information and the identities of the informers are treated with confidence in line with the Authority’s secrecy provisions.
Further to this, Zimra has an anti-corruption hotline that has also been very effective in terms of bringing to the attention of Zimra possible cases of revenue leakages.
WZ: After Statutory Instrument (SI) 64 there appears to be a lot of goods from outside the country being sold on the black market, for instance in downtown Harare. How has this affected the collection of revenues?
FM: Introduction of smuggled goods into our markets results in loss of revenue to the state as in the form of customs duties and import taxes. It also compromises regulatory controls that have been put in place. Some of these goods are smuggled in through undesignated and illegal crossing points and Zimra continues to work in collaboration with law enforcement agents to curb the illegal activities.
WZ: How far has Zimra gone with enhancing automation, e-services, invoice management and electronic cargo system?
FM: I should start by acknowledging and apologising for the system challenges faced in connection with the Automated System for Customs Data (Asycuda) World and e-services platform towards the end of last year. Zimra is working tirelessly to ensure that such challenges do not recur in the future.
On the customs side, the electronic lodgment of entries has reduced agent-officer interface and materially this has reduced the propensity for rent seeking. It has created convenience to clients who can lodge entries from anywhere in the world.
Zimra has also recently launched the e-TIP application, which allows tourists and visitors who intend to bring a motor vehicle into Zimbabwe during their visit to capture the temporary import permit for the vehicle prior to their arrival. This is done through a web-based platform, which has gone a long way in expediting clearances at our ports of entry.
The e-services platform enables registration of clients online, submission of returns and account management. Zimra continues to strive for better performance of e-services platform and is attending through our vendors to some of the challenges that the system is currently presenting.
A total of 9 032 clients have acquired and installed fiscal devices to date and Zimra was appointed as one of the suppliers of the fiscal gadgets. There are, however, challenges on supply of devices due to foreign currency shortages. Engagements between Zimra, the Ministry of Finance and the Reserve Bank of Zimbabwe are underway to mitigate the challenges.
WZ: How much in terms of potential revenue does Zimra project to generate as a result of the upgraded Internet-based Automated System for Customs Data (Asycuda World)?
FM: Zimra is in the process of upgrading Asycuda World and the upgraded system is expected to be rolled out by June 2018. The upgrade of the Asycuda World system offers convenient and faster clearance processes and in the process facilitating faster movement of travellers and commercial cargo. The clearance facility is web-based and can be accessed from anywhere in the world. The revenue projections depend on compliance culture of clients and general improvement in industrial activity in the economy.
WZ: Do you anticipate any challenges that can prejudice Zimra revenue even after the Asycuda system upgrade?
FM: The authority does not anticipate any challenges with the upgraded Asycuda World system. The upgraded system is anticipated to improve the efficiency of the clearance system and to reduce the turnaround time for clearance processes. The system is expected to be rolled out in June 2018.