via Zimbabweans owe $1bln in unpaid tax – NewZimbabwe 28/06/2015
THE country’s tax agency says unpaid levies have doubled to more than $1 billion over the last two years as the economy tilts towards the informal sector due to company closures, warning that it could miss this year’s revenue targets with dire repercussions for Treasury.
Government finances its entire budget from taxes because multilateral lenders like the International Monetary Fund (IMF) and World Bank have said they will only resume lending to the country once it clears its over $10 billion debts with the global lenders.
This year, Zimra has targeted to collect $4,1 billion revenue against expected expenditure of $4,115 billion and Zimra boss Gershem Pasi said the country needs urgent policy reforms to address the rapid de-industrialisation and the informalisation of the economy, adding that the agency “would have challenges in meeting targets.”
Official data shows that 4,610 companies closed operations between 2011 and October last year, rendering over 64,000 workers jobless, although analysts believe the figures could be higher.
Company closures have resulted in the proliferation of informal businesses that are largely evading tax obligations, Pasi said, adding that outstanding taxes were at $1 billion, from $500 million in 2013.
“We have challenges with the SMEs because there is a high level of non-compliance. Most of them are of no fixed aboard.
“We need to have a developmental industrial policy which can help us resuscitate industries,” Pasi told a parliamentary portfolio committee on SMEs and cooperative development.
“The level of compliance is a reflection of the current economic hardships where we have liquidity constraints, lack of credit lines which I think have also been made worse by the closure of too many companies.”
Zimra also threatened to ‘act ruthlessly’ on companies and individuals that failed to negotiate with the authority for a payment arrangement of outstanding tax obligations during an extended window opened last year.
“Amnesty, we had to extend it, it is now coming to a close at the 30th of this month and I must say the response has not been what we expected. We came up with the issue of amnesty because there was a lot of pressure on Zimra that we were being too heavy-handed in collecting revenue,” Pasi said.
“We are now saying that after the amnesty, we need to be ruthless and we may want our minister to bring some legislation which can tighten it further for those who are delinquent because we have done all we can to say ‘come clean’.”
Limited access to long-term capital and antiquated machinery has resulted in thousands of firms folding, driving thousands into to the poorly regulated informal sector.
COMMENTS
How much does the President owe? What about all the guys who have been stealing our diamonds? Have any of them paid even a cent? The commander of the army, does he pay tax. Pasi go get your money from your friends who never pay taxes
Perhaps even Pasi himself should show us that he and his management team are paying their taxes fully. Or would that be another scandal in terms of the salaries they are drawing…
In my opinion, all the Zanooo mini-stars and MP’s are personally liable for the stolen money. Many billions, actually.
And in a country that actually has a Mini-Star of De-Industrialsation, how can they expect to collect taxes?
And . . . do Zanoids pay taxes? I would not think so. And . . . how much has The Bhobho stolen, personally?
The processes of de-industrialisation and imformalisation are a direct response to government’s economic and political policies over the years. Not only were the policies detrimental to the country but the government’s inability to anticipate the consequences of their policies, and to provide for these, is further proof of the damaging ineptness of this regime. The first steps to recovery will only be made once we have experienced a game changing retirement or funeral, and even then it will be a long walk back to prosperity.
Even if all these tax payers paid their tax arrears tomorrow what value would they get in their lives? What would Zanu PF do with the US$ 1 billion if they received it tomorrow?
Same as always before grabmore – steal it. What else?