Source: Fiscal bullies, terrorism a threat to the fiscus | The Financial Gazette December 1, 2016
THE continued deterioration of Zimbabwe’s economy is causing untold suffering among the majority of the citizenry who have, by design or default, remained in the country.
There are no particular areas of the economy that may be looked at with joy and unreserved hope.
The National Budget continues to extend into undue deficits and this is causing major headaches for planners in terms of how they could fund such gaps.
From the trade front, imports continue to pour into the country and, not surprisingly, compete aggressively with the few local products on prices.
The few resilient, patriotic and lucky firms still operational, or better still, that are trying to make sure they contribute meaningfully to the upturn of the economy, are faced with a plethora of business and man-made challenges.
Some of these challenges may be alleviated by deliberate policy positions meant to change the fortunes of the country.
As opposed to thwarting the creativity and survival instinct of the populace by statutory instruments that inhibit the very survival of the individuals and enterprises, options that are not self-seeking and promote competitiveness are a better option to draw the country up to its regional, and perhaps, global peers.
Admittedly, our circumstances require the highest degree of flexibility and creativity. They are not normal.
This manifests from various windows; from huge unemployment numbers, exorbitantly priced and poorly competing local products and cash and liquidity shortages.
Promoting a local entity under these circumstances may require flexing the “normal” business provisions to match the abnormal circumstances with a view to aid the economy to swim ashore, to safety.
One such possible avenue that has been inhibited by reluctance from the policymakers has been the tax avenue. Important as it is to largely sustain the fiscus, this one common denominator between government and business has had little attention from the policymakers to better the economy.
Given the harsh business atmosphere that local businesses find themselves in, the taxman has continued to unleash terror to the barely surviving businesses. The tax amnesty extended was inadequate given the economy never really recovered in a while since dollarisation from a business perspective.
Such fiscal terrorism has, in a number of instances, been solely responsible for the closure of companies due to inflexible tax conditions.
Such arrogant stances on pursuing and recovering taxes from ailing institutions do not improve the fiscal space.
In contrast, it diminishes the chances of ever growing the fiscus in the short to medium-term.
Quite understandably, the policymakers are reluctant because seemingly they wish not to adjust their “luxuries” in sympathy with the real economic atmosphere. They would rather; the taxpayer is milked dry for as long as that will “provides” for them in the interim.
Later, we then lament the tragedy that was consciously manufactured by lack of flexibility obtaining from self-indulgence.
Lately, the tax authority has been transformed into a fiscal terrorist, less sympathetic to the unusual business circumstances that face enterprises today by applying the same tax principles that were applicable in a completely different economic setting.
To put you into perspective, try and interrogate the age of the current Income Tax Act Ch23:06.
Without despising the need and importance of paying taxes in a timely manner, we should not be unconscious to the circumstances in which the taxpayers are exposed to.
Establishing common ground can be a sure way to encourage good corporate “citizenry”. It can, further, be a stimulant to court taxpayers to a committed long win-win relationship into the future unknown terrain.
Fiscal bullying is a condition that subsists in cases of fiscal impunity.
When taxpayers are unduly exempted and use undue means to evade and defeat the tax contribution obligations it is tantamount to fiscal bullying.
In an environment where the majority are generally concerned about how the fiscus is used or abused, it defeats the desire of taxpayers to play their part when the deemed greatest plunderers are in the habit of evading taxes by abusing their positions in society to further deplete the resources they do not, themselves, contribute.
There has been quite some talk about who does not pay taxes because of this or that position or title.
Further, we have noticed tax cases that are only ignited when the foundations of one’s power are shaken.
The question is: Are the taxman’s eyes only opened when some taxpayer is stripped of power or status?
It is apparent that, while the status exists, some remain untouchable till they flip to “the other side” of the power spectrum.
Such fiscal bullying is a great blow to the patriotic contributors.
Such tax protesters may invoke tax resistance.
The fiscus needs to make the requisite adjustments to enable downstream policy review that incorporates the woes of the tax- payer.
Tax collection, as a matter of law, must further ensure that there are no sacred cows so everyone participates to the development of the nation.
The policymakers need to awaken to the reality that when things are not well everywhere, they cannot continue to enjoy normal benefits, otherwise they may fail to fully grasp the reality of how bad things are simply because nothing changes for them. It is time we all make adjustments throughout the entire value chain.