PSMAS top earners were not paying tax

via PSMAS top earners were not paying tax | SW Radio Africa  by Nomalanga Moyo on Monday, March 17, 2014

High-earning Premier Medical Aid Society (PSMAS) executives have been enjoying tax-free salaries since 2009, the State-run Herald newspaper claims.

The medical aid group is one of several State-linked enterprises at the centre of the raging corruption scandals in which senior executives have been raking in millions in salaries and allowances, at the expense of service delivery.

Last year alone the group’s now-retired chief executive officer Cuthbert Dube was paid $6.4 million, while group operations executive Enock Chitekedza received $2 million and, according to the Heraldreport, this was not taxed.

Millionaire salaries of several other executives at the group were also not taxed, and as a result the Zimbabwe Revenue Authority lost $40 million in potential revenue which it is now trying to recover.

Presidential spokesman George Charamba was paid $100,000 in board fees.

Last week, the revenue authority reportedly garnished PSMAS bank accounts signifying its intention to seize PSMAS funds to settle the tax arrears.

But the garnishee order was cancelled after PSMAS hurriedly paid $2 million and offered the revenue authority “an acceptable payment plan”, the Herald said.

Figures indicate that Dube and his 14-member executive team enjoyed a combined annual salary of $19 million, while ordinary members of the society could not access medical aid because PSMAS was not paying service providers.

At the end of last year the medical aid group owed creditors $38 million, excluding the $40 million which it owes to the taxman.

Since details of corruption and financial mismanagement began to emerge in the press, officials at the group have said efforts are under way to clear the debts and restore the confidence of its more than 800,000 members.

Many Zimbabweans have called on the President Robert Mugabe and his ZANU PF government to take the lead in fighting corruption. So far, despite evidence of fraudulent activities at State-linked institutions, most of the offenders have not been charged. The country’s prosecutor-general has already declared that there will be no prosecutions over ‘Salarygate’ which he said was a moral and not legal issue.