Govt won’t stop tax raids: Chinamasa

via Govt won’t stop tax raids: Chinamasa – DailyNews Live 29 July 2014

HARARE – The Zimbabwe Revenue Authority (Zimra) will continue issuing garnishee orders to companies that evade tax, Finance minister Patrick Chinamasa has said.

He told Parliament last week that “Zimra’s mandate is tax collection and the revenue collector will do all it can to fulfil this mandate.

“Although Cabinet has not deliberated on Zimra garnishee orders, Zimra is given a mandate in terms of the statute that sets it up and that mandate is to collect revenue,” the Treasury chief said.

This comes as Zimbabwe is hard pressed after failing to secure budgetary support, and is footing its wage bill and recurrent expenditure from tax collections.

“Unless Zimra collects taxes, there will be no budget,” Chinamasa said.

“What we should say is not to discourage Zimra from collecting taxes, but to encourage them and also to give advice that when doing so, while being firm, they should be friendly,” he said.

The former Justice minister was responding to a question by Gweru legislator Amos Chibaya about the tax collector’s garnishee orders that are seemingly leading to company closures.

“We all know from Biblical times that tax collectors are never a liked class. They are always despised and you can read that throughout the Bible. I understand the concerns of people who are being levied taxes. Generally, people do not like to pay taxes,” Chinamasa said.

Early this year, the Gershem Pasi-led Zimra descended on companies defaulting on their tax obligations, imposing garnishee orders on their bank accounts.

Of these defaulting companies, over ten have dragged the taxman to the Fiscal Court of Appeal over the orders.

Despite some companies voluntarily disclosing their arrears to the tax collector and proposing payment plans, they were not spared the garnishee orders.

Other companies have approached the High and Constitutional Courts after the filing of their appeals at the Fiscal Court of Appeal failed to bar Zimra from garnishing their accounts.

Recently, Pasi said garnishee orders were only used as a “last resort” for “truant and noncompliant clients”, and was not the modus operandi of Zimra in collecting revenue.

He also said Zimra will soon launch a scheme to issue garnishee orders to State enterprises.