MP’s firm seeks interdict

via MP’s firm contests $3m tax demand – NewsDay Zimbabwe.  11 June 2014  by Phillip Chidavaenzi

June 11, 2014 in News

GOKWE-NEMBUDZIYA MP Justice Mayor Wadyajena’s company, Mayor Logistics (Private) Limited, has filed an urgent chamber application with the Constitutional Court (Concourt) seeking to interdict the Zimbabwe Revenue Authority (Zimra) from garnishing its bank account over alleged tax evasion involving over $3 million.

In the application, filed under case number CC241/14, Wadyajena’s lawyer Dzikamai Machingura said his client disputed Zimra’s assessment that the firm owed it $1 619 161,32 in value-added tax (VAT) and $2 066 652,84 in income tax, including penalties and interest.

“Applicant (Mayor Logistics) also seeks that respondent (Zimra) be interdicted from collecting VAT and income tax pending the outcome of its appeal which is now before the Fiscal Appeal Court as any such collection would effectively destroy applicant’s business especially in light of the colossal amounts being claimed by the respondent,” the application read in part.

Machingura said the dispute emanated from the fact that there was a misunderstanding on Zimra’s part regarding his client’s business transactions at the time.

“Applicant (Mayor Logistics) has all along disputed that the amounts are legally due and owing to the respondent (Zimra) for the reason that respondent failed to understand the true essence of the business transactions which applicant was involved in during the period of the tax review,” read the application.

“In fact, applicant has since filed an appeal with the Fiscal Appeal Court challenging the respondent’s aforesaid tax assessment.”

Machingura said Mayor Logistics’ constitutional right to “reasonable administrative justice” had been violated through Zimra’s “arbitrary decision” to collect the tax ahead of a pending determination of the applicant’s fiscal appeal.

“Whilst the need for respondent to be able to collect taxes efficiently and effectively is acknowledged, it is equally more important that a taxpayer’s constitutional rights as a taxpayer should also be considered. The prospect that an eventual successful appeal in the Fiscal Appeal Court might reverse the situation is no answer to the actual infringement which endures until then,” he said.

Following the tax assessment, the applicant has argued that Zimra misunderstood the nature of Mayor Logistics’ transactions with an undisclosed third party.

The company subsequently filed its objection with Zimra, but to no avail, forcing Mayor Logistics to file an appeal with the Fiscal Court.

A determination is yet to be made.