Ex-parastatal boss in $300k tax evasion case

Source: Ex-parastatal boss in $300k tax evasion case | The Herald July 12, 2017

Hazel Lifa Herald Reporter
Former Allied Timbers Zimbabwe group chief executive Mr Joseph Kanyekanye did not deduct Pay As You Earn from his salary over a long period, thereby evading paying close to $300 000 in taxes to the Zimbabwe Revenue Authority.

His bid to claim terminal benefits through the courts has since hit a brick wall after it emerged that he owed zimra the tax arrears. The High Court had already ordered the parastatal to pay Mr Kanyekanye $54 225,99 as terminal benefits.

As the company was about to comply with the order, an audit revealed that during the greater part of his employment with the parastatal, income tax was not being deducted from his earnings under unclear circumstances.

The audit showed that Mr Kanyekanye instead owed the tax collector $293 698. To that end, Allied Timbers successfully sought rescission of the earlier judgment for the payment of $54 225,99.

Judge President Mr George Chiweshe quashed the earlier verdict which was in favour of Mr Kanyekanye, saying his benefits had been subsumed by his tax debt.

“The respondent is, therefore, liable at law to pay tax to the fiscus,” he said. “He deliberately failed to do so. Further, in terms of article 3 of the 13th Schedule, the employer is obliged to withhold tax on behalf of the fiscus.

“It is for this reason that the applicant (Allied Timbers) has not disbursed the respondent’s benefits as the respondent owes tax to zimra, to whom the employer must pay from the respondent’s earnings and benefits.”

Justice Chiweshe allowed Allied Timbers to defend its findings in a trial court. In the judgment, Justice Chiweshe considered submissions by the parastatal that Mr Kanyekanye, being the chief executive officer, should have led by example in ensuring that tax was deducted.

He said only a trial would clarify several questions related to the non-payment of tax. “The respondent was applicant’s chief executive officer and in-charge of the applicant’s day-to-day operations,” he said.

“Why was he not effecting tax deductions from his pay as is required by law?

“If his tax bill exceeds the amount due to him by way of benefits, does the applicant then owe him anything? All these issues deserve to be ventilated.” In an opposing affidavit, Mr Kanyekanye argued that the company was simply trying to frustrate his efforts to get terminal benefits by raising a “surprise defence”.

“The applicant had agreed to pay terminal benefits within three months,” he said. “The applicant is seeking to evade this obligation by raising ‘a surprise defence’ to do with zimra, outstanding taxes.”

Mr Kanyekanye left the parastatal on February 16 2015, following a mutual termination of his employment contract.

He sought legal action last year after the firm failed to pay his dues and was granted his claim on January 27, 2016.


  • comment-avatar
    Mukanya 5 years ago

    The script is identical in all parastatals’ fired bosses!!!