THE Transparency International Zimbabwe (TIZ) has lambasted the culture of impunity in dealing with high profile corruption cases and misuse of public funds by public officials in the country which has weakened the capacity to ensure compliance with tax payments.
BY MIRIAM MANGWAYA
In a recent report on tax compliance and corruption, TIZ said poor tax compliance in the country has also resultantly been detrimental to the growth of Zimbabwe’s economy, which largely depends on taxation.
Its statement comes at a time the 2020 Midterm Fiscal Review statement stated that taxes contribute 97,6% of government revenue.
“A robust tax administration system ensures the collection of the right amount of tax at the right time, at minimal costs to the government, while imposing the least burden to taxpayers,” TIZ said.
“However, corruption continues to worsen the country’s macro-economic situation. Good governance which encompasses the absence of systemic corruption, is therefore, vital for macro-economic stability as well as sustainable and inclusive economic growth,” they said.
TIZ said that corruption and lack of transparency compromised revenue mobilisation, at a time the country is struggling with a huge domestic debt of US$9,2 billion, while inflation is pegged at over 650%.
Zimbabwean citizens planned a mass demonstration on corruption on July 31 this year, but were thwarted by the government, which considered the protest as an insurgence against its rule.
A 2019 report by the International Monetary Fund (IMF) estimated that developing countries, Zimbabwe included, lost US$1,26 trillion annually due to corruption, bribery, theft and tax evasion.
The IMF report is supported by the Reserve Bank of Zimbabwe, which says between 2015 and 2017, the country lost US$3 billion to illicit financial flows.
But TIZ said that losses to illicit practices could be prevented if the government adopted an automated and computerised tax payment system which is both cost effective and efficient for auditing and detecting fraudulent cash flows.
It said there was a need for implementation of a simplified tax administration system, which is compatible and sensitive to the informal sector and to small to medium enterprises (SMEs) to encourage them to pay taxes through the formal systems.
Economist Eddie Cross also reiterated the need for the government to curb corruption and ensure accountability, which is fundamental to the growth of the economy.
“Even high profile politicians who have been brought before the courts on corruption charges should be prosecuted to show the government’s commitment on fighting corruption,” Cross said.
Two former Cabinet ministers, Obadiah Moyo and Priscah Mupfumira were fired on corruption allegations involving millions of US dollars, but their cases have not yet been finalised at the courts.
TIZ recommended that the government should be committed to fight corruption without fear or favour, adding that its actions on fighting corruption should be more visible and authentic to the public.