Source: Government, creditors in debt-tax swap | The Financial Gazette November 17, 2016
FINANCE Minister Patrick Chinamasa says local authorities and businesses that are in tax arrears while at the same time being owed by government and its departments can approach his ministry with a view of getting the debts converted into tax credits.
Chinamasa said this last week at the annual congress of the Zimbabwe Building Contractors Association where representatives from local authorities and construction firms highlighted that despite them being owed substantial amounts of money by government or its departments and parastatals, the Zimbabwe Revenue Authority (ZIMRA) still adopts a no-nonsense approach towards them, including slapping them with penalties and garnishing their accounts.
Chinamasa admitted that there was an element of injustice in what was happening and said where such cases can be presented to his office, he would be able to intervene.
“It’s a vicious circle, government owes a supplier, and the supplier owes another supplier and that supplier owes the local council and no payment is being made in this vicious circle to break it and, as a result, the players in the value chain or in the circle are just collapsing.
“I will certainly be looking into it. We have been allowing swapping of debt, but only past debts, not future debts. If you can come with a clear case where you are owing ZIMRA in taxes and a government department, like the army or the police is owing you and you give us clear specifications of that relationship, we will try to help,” Chinamasa said.
Some of the delegates accused ZIMRA of adopting predatory tendencies such as investigating and demanding taxes going back to many years back, or reviewing taxes that have long been paid.
Chinamasa said while the tax collector should not precipitate the collapse of businesses, most of those who make the most noise are not clean themselves, as most local businesspeople are notorious for evading tax.
He said it was unfortunate that most disputes were being escalated to his office when he had no powers under the legislation to interfere in such cases.
“I have no powers to give anyone an exemption and I don’t like that power, it is corrupting power… any person with discretion over such issues, sooner or later will be corrupted, not just by money, but even by relatives who would come asking for favours, so I don’t like that power,” Chinamasa said.
He was at pains to convince the meeting that the increase in police traffic checkpoints was not a deliberate fundraising initiative by a government that, by his own admission, is struggling to remain afloat.
In the process of explaining himself, Chinamasa revealed that the money being collected from traffic offenders was no longer being kept by the police for use in their operations, but was now being banked in a special account at the Reserve Bank of Zimbabwe.
It was not just the building contractors who complained bitterly that the traffic checkpoints were becoming costly to them because they are spending more and more time trying to secure the release of their vehicles detained by the police, but senior government officials as well.
Vice President Emmerson Mnangagwa said the 10 police check-points between Harare and Rusape were just too many, while the deputy chief secretary to the President and Cabinet, Ray Ndhlukula, said last week a consultant from Malaysia with whom he was travelling with to Mutare could not believe it after counting a total of 15 traffic check-points between Harare and Mutare.