BY TAURAI MANGUDHLA
REVENUE collector Zimra’s whistleblower facility was introduced to fight fraud and recover taxes from offenders, with the whistleblower getting 10% of recovered funds. Concerns have been raised that the system was susceptible to corruption and abuse by officials. Our chief business reporter Taurai Mangudhla (TM) interviewed Zimra commissioner in charge of revenue assurance Regina Chinamasa about the performance of the facility. Below are the excerpts:
TM: Very briefly, in an ideal situation how is the facility supposed to work?
RC: Bona fide informants and individuals submit original and specific information to Zimra on tax and duty evasion. This may be accompanied by evidence. Zimra will swiftly act on the information by carrying out investigations and recovery of any tax prejudice. The informant will be rewarded 10% of the revenue actually recovered from the taxpayer which directly flows from the information that has been provided. We would prefer that full recovery is achieved without delay so that informants receive their rewards in full early and get value for money.
TM: Does the whistleblower facility really work in terms of compensation for those sharing critical tip offs?
RC: The facility works. However, the compensation to informants is after successful investigation and recoveries of the revenue established. The process of investigation may take long to finalise, especially where there are gaps in the information provided and the taxpayer is not cooperating. In some cases, recovery of established tax debt may also take time. These circumstances result in delays of payment of rewards to informants.
TM: How many people have benefited from last year to date and what were the amounts involved?
RC: Since January 1, 2020, a total of ZW$5 463 302,38 (US$64 274) and US$4 228,16 has been paid out to 85 whistleblowers.
TM: Is there evidence these people were actually paid because there has been a lot of controversial coverage around the whistleblower facility with people claiming it is shrouded in mystery and that whistleblowers and the public do not get as much information on the issue, please comment.
RC: It is not ideal for Zimra to present evidence of payments to informants to the general public. Whistleblower information is very confidential and has to be handled as such. However, going forward, I think it would be necessary to publish summary financial statistics of recoveries and payments in order to clear this perception. Zimra and its staff are guided by the Oath of Secrecy and it must be understood that the law does not allow the sharing of taxpayer information with the general public. In addition to that, the confidentiality of whistleblower identity is critical.
TM: Some whistleblowers have gone to the press to complain about non-payment of rewards. What is your comment on this?
RC: As an authority, we have an open-door policy and we have no reason to withhold payment of rewards. The practice of going to the press may not be the best solution, as it will only help expose their identity thus posing a security risk on themselves and their families. Payments to whistleblowers are triggered by a payment from the taxpayer to the specific debt established on the information reported by the informant.
Delays in recoveries emanating from various challenges experienced by the reported taxpayer such as company closures, incapacity to pay, general defaulting which then triggers Zimra to take other longer recovery measures to facilitate the payment of the reward. I encourage our valued informants that should there be issues relating to non-payment of rewards, they make use of the available internal channels in order for them to be amicably resolved. Informants have every right to request for updates on cases that they have reported to us and we always ensure that we give them detailed updates.
TM: There is a belief that some of the whistleblower funds never make their way to the deserving whistleblowers and they get diverted and given to relatives and friends of Zimra employees and officials. Is this happening? If it is happening how prevalent is it?
RC: This is a far-fetched allegation. There are checks and balances in place which ensure that payment is done to the bona fide person who reported the case. When someone comes forth to report a case, they complete a form and give their identity and banking details. These are confirmed with the informant before payment is processed, hence paying Zimra employees on a case belonging to an informant is highly unlikely. The facility is also audited by internal audit and external auditors. As an authority we have not had that happening. If this is alleged to have happened in the past, we would encourage the informants to approach Zimra management with more information so that investigations are conducted. As Zimra, we have a zero tolerance towards corruption. Our promise is that such cases will be thoroughly investigated and corrective action will be taken in terms of the law.
TM: What measures and checks and balances are in place to ensure that the facility is not abused?
RC: The reporting criteria are defined in the regulations guiding the management of the facility, which excludes Zimra employees and their near relatives. The regulations also elaborate on the standard and quality of acceptable information which has to be authentic and backed by credible evidence not just hearsay or speculation. Within the administration of the facility, there is clear segregation of roles and access rights to manage confidentiality and abuse. The facility just like all other processes within Zimra is subject to internal and external audits, as well as integrity management scrutiny. Externally, reports of abuse can be made to other law enforcement agents for their interventions.
TM: What are your future plans for improving this facility?
RC: Plans are already underway to automate the whole system so as to remove human interface between Zimra officials and the whistleblowers and am positive this will provide seamless, efficient and a more robust administration of the facility.
TM: In other countries, whistleblowers are not rewarded for bringing to the fore tax offences, as this is considered a national duty for every citizen. What is Zimra’s take and comment on this, is it an option worth considering?
RC: Whether or not monetary incentives work is an issue closely related to national customs and cultures. When the reward was introduced, it was meant to incentivise citizens to expose corruption and so far so good. However, like with every other programme, there is continuous monitoring and evaluation and if it comes to a point where the benefits are now being outweighed by the costs, it may be an option worth considering as guided by the policy makers.