ZIMRA raids ZCTU education funds

Source: ZIMRA raids ZCTU education funds | The Financial Gazette November 17, 2016

THE Zimbabwe Revenue Authority (ZIMRA) has garnished over US$50 000 belonging to the Zimbabwe Congress of Trade Union (ZCTU) Education Fund.
ZCTU, the country’s oldest and biggest trade union, had its account at Standard Chartered Bank raided in September, in what unionists view as an attempt by the ZANU-PF government to cripple the labour movement, financially.
The union gave birth to the Movement for Democratic Change (MDC), the largest opposition party in the country, in 1999.
Morgan Tsvangirai, the MDC-T’s president, was ZCTU’s secretary-general, while Gibson Sibanda, now late, was the union’s president.
Sibanda was Tsvangirai’s deputy when the MDC was formed, before breaking away to form a splinter group presently headed by Welshman Ncube in 2005.
In a letter dated September 21, 2016, signed by secretary-general, Japhet Moyo, ZCTU pleaded with ZIMRA to reverse the garnishee order, arguing that the seized funds had been availed by cooperating partners who support the labour federation’s education programmes that cover capacitating workers through training in areas of, for instance, labour rights and sexual harassment.
The funds are also used to train workers on climate change issues, health and safety at the workplace as well as training labour law paralegals, who represent workers in labour disputes.
“Please be advised that these funds are purely for the implementation of activities as per the agreements between us and the partners and this garnish will affect the operations of the ZCTU, our relations with partners and will also have a negative effect on the country’s risk status internationally,” reads the letter in part.
Among the garnished funds was US$10 852,82 donated by the Union Aid Abroad, based in Australia; US$10 857,81 from Swedish-based trade union, Olof Palme Centre; US$10 212,91 from the United States-based Solidarity Centre, a non-profit organisation which helps to build a global movement; and US$13 807,98 donated by Belgian FOS-socialist solidarity labour organisation.
Highly-placed sources within the labour fraternity said they could not rule out the possibility that government was out to suppress trade unions because the taxman was in the habit of inflating the amount they owed.
“We also have a bank account that has been garnished since 2011 to date and we were asked to bring copies of the bank statements because the payments made through that account had not been captured,” said Moyo in one of the letters to ZIMRA.
The labour federation has desperately tried, to no avail, to convince ZIMRA to reverse the garnish order and refund the seized amounts.
Efforts to get clarity on the matter from ZIMRA’s corporate communications officer were fruitless.
Messages sent via phone text and e-mails were never responded to, while calls were never answered.
In a letter dated October 17, 2016 signed by an I. Chikuni, who is Greater Harare’s regional manager for domestic taxes, ZIMRA turned down a request by ZCTU to have the garnish order reversed.
“Please be advised that (the) uplift of garnish order will only be considered after all outstanding returns have been submitted, all current obligations have been settled and a payment plan proposal that would see you settling your total debt in 12 months,” reads the  letter in part.
In a last ditch bid to recover the seized amount, Moyo has since notified Ngoni Masoka, the secretary in the Ministry of Public Service, Labour and Social Welfare explaining how ZIMRA has crippled the ZCTU’s operations by garnishing all its accounts.
“Kindly take notice that the failure to remit the taxes is not deliberate, but it is arising from the failure by our affiliate unions to pay their subscriptions. Our affiliates are also owed by companies who are also not remitting trade union dues and some not paying their employees. Despite this difficult situation, the ZCTU has been remitting monthly the little amount paid by its affiliates,” said Moyo in a letter to ZIMRA.
“Our partners are likely to classify us as a risk organisation and also portray our country as risk in doing business,” Moyo added while informing the Minister of Public Service, Prisca Mupfumira  that he had unsuccessfully engaged the ZIMRA acting commissioner general, Happias Kuzvinzwa over the issue. Kuzvinzwa was said to have told Moyo that ZIMRA no longer had the money because it was remitted to the Ministry of Finance.
“We request for the uplifting of the garnishee order to enable us to conduct our business. Your urgent intervention is greatly appreciated,” pleaded Moyo.
ZIMRA, which is under serious pressure to beef up government’s thinning revenue base, missed revenue collection targets by six percent during the period between January and June this year.
The tax authority raised US$1,65 billion against a target of US$1,75 billion.
The tax collector is said to have lost US$356 million to  measures introduced by government this year to restrict imports in the first half of the year.
There remains a high probability that the figure could increase due to the effects of the recently gazetted Statutory Instrument 64 of 2016 effected in June, which made it illegal to import specified basic commodities.
One of ZIMRA’s key revenue sources — mining royalties — churned in US$33 million against a target of US$52 million. The revenue head fell 17 percent from US$39 million collected during the same period last year.
Corporate tax went down by 13 percent to US$144 million during the first half, due to poor compliance. Value Added Tax on imported goods in the same period, amounted to US$170 million, down by 21 percent from US$215 million compared to the same period in 2015. This was again linked the anti-imports policies occasioned by SI 64.
Customs duty also went down by 15 percent from US$160 million in the first half of last year to US$135 million.