via Audit report details rot at Nssa – The Zimbabwe Independent January 15, 2016
THE National Social Security Authority (Nssa) incurred US$10,3 million in tax interest and penalties on payroll related items at a time executives awarded themselves hefty salaries and benefits prejudicing thousands of pensioners in the process.
An audit report by Deloitte Advisory Services for the period August 1, 2013 to June 30, 2015, seen by the Zimbabwe Independent, revealed that Nssa executives awarded themselves salaries of up to US$30 000 and housing loans of up to US$2 million.
However, a review done by the Zimbabwe Revenue Authority (Zimra) in April 2014 revealed that Nssa had failed to pay tax for the benefits resulting in the tax body effecting a garnish order, which saw US$7 665 258 being seized from Nssa’s accounts.
Nssa has been at the centre of poor corporate governance in recent times which resulted in the new board sacking senior management, including general manager James Matiza.
The auditors recommended that Nssa should consider recovering the actual tax liability, excluding interest and penalties, from former and current employees.
The report shows that Zimra’s tax demands on Nssa included Pay As You Earn (Paye) on executive board benefits amounting to (US$430 280), loans for managers (US$61 344), motor vehicle disposals (US$646 314), board member benefits (US$434 205), residential properties benefits (US$232 365), value-added tax (Vat) on motor vehicle deemed benefit (US$207 300) and withholding tax on tenders (US$8 288 926).
The audit reveals that Paye and penalties of US$434 205 have been paid to Zimra since that time.
“The debt has been investigated, the penalties and total amount claimed by Zimra as tax has been to date reduced to US$3 362 795 after the garnish order,” the report states.
“Management is in the process of gathering information to aid them in further reducing the amount of penalties due to Zimra and this is currently still in progress.”
The report states that the debt has been recorded as receivable in the management accounts of the entity.
Earlier, in February 2014, Zimra contended that any benefits accruing to non-executive directors other than sitting allowances should be considered remuneration and taxed at Paye rates.
Zimra also said Nssa’s vehicles sold to employees were below market value and were deemed as benefits for which Paye was applicable.
The tax authority, according to the report, also said staff occupying Nssa’s properties were paying below market rentals therefore there was a deemed benefit subject to Paye.
Nssa, says the report, paid tax on behalf of executives although it should have been deducted from their benefits.
“It appears the authority also paid tax on most of the items mentioned above on behalf of current and former employees and directors,” reads the report.
The minimum monthly payout for the struggling pensioners is at US$60 for old age pension, US$30 for invalidity pension as well as a US$300 funeral grant.