Zimra implores businesses to pay taxes

Source: Zimra implores businesses to pay taxes – The Standard July 3, 2016

The Zimbabwe Revenue Authority (Zimra) has pleaded with business and industry to pay up their tax obligations as revenue collections continue to nosedive due to the prevailing harsh economic environment.

Fidelity Mhlanga in Victoria Falls

Zimra acting commissioner-general Happias Kuzvinzwa, who was speaking at the Zimbabwe National Chamber of Commerce annual congress in Victoria Falls on Thursday, implored the business sector to create a culture of compliance to avoid penalties.

“Each time people come to my office asking not to pay, saying they have no money. Let us create a culture of compliance. Business should avoid being a magnet of penalty due to non-compliance. Let’s be true to ourselves. Do what’s morally right and just for the country. Let’s share the tax burden,” he said.

The tax collector has already missed its revenue collections for the first quarter of 2016 as the economy falters.

Zimra’s net revenue collections for the first quarter stood at $724,8 million, 15,9 % below the $861,83 million target.

The net collections were 9,75% lower than those of the first quarter of 2015.

Kuzvinzwa added, “Non-compliant operators should be crowded out. Some people are getting away with it, but some will not. Don’t sink your business by giving a debt to it. Zimra is open and will receive those with debts and negotiate. Commit to pay those outstanding debts. Come, let’s reason together. We don’t want to garnish accounts. Meet current obligations. Debts must increase on interest not because of non-compliance.”

He slammed cross-border traders protesting against measures to curb imports at the Beitbridge border post.

National Assembly speaker Jacob Mudenda weighed in, saying government was setting a wrong precedence by absorbing parastatals’ tax liabilities at a time the chief executive officers were earning hefty salaries.

“Is that a good culture where government takes over taxes by parastatals? Chief executives of parastatals must be accountable for that. A recent example is Hwange’s $68 million debt takeover by government. It’s like you are trying to fill up the hole, while the hole is bottomless. When you look at what chief executive officers of parastatals are getting in salaries, it is unbelievable,” Mudenda said.

In March 2014, government imposed a salary cap of $6 000 for top earners in parastatals and local authorities after it emerged that quasi-government entities were paying senior employees mega-salaries but this has not yet been effected.

Most parastatals are technically insolvent and a perennial drain on the struggling fiscus due to mismanagement, poor corporate governance and corruption, among other vices.
In her report for the year ended December 31 2015, the auditor-general Mildred Chiri raised concern over the huge amounts of funds being salted out of the tax system by state CEOs.

“A number of entities were paying board fees, management salaries and benefits which were not authorised or which were not subjected to tax. Allowances were paid outside the payroll and were not being taxed, contrary to the Income Tax Act, resulting in penalties for non-compliance,” the report said.