Zimra predicts “serious revenue shrinkage,” eyes offshore account tax

via Zimra predicts “serious revenue shrinkage,” eyes offshore account tax | The Source  on April 8, 2014 By Bernard Mpofu

Zimbabwe’s revenue agency marginally exceeded its target of $818 million for the first quarter of this year, but predicts tapering collections amid a worsening economy and seeks to tax funds held in offshore accounts to ease a deepening cash crunch.

Zimbabwe is relying almost entirely on the Zimbabwe Revenue Authority’s collections, due to limited access to donour funds after falling out with the West over perceived human rights abuses by President Robert Mugabe and the failure by Harare to service its debt to multilateral lenders.

Commissioner-general Gershem Pasi told a parliamentary portfolio committee on foreign affairs that the agency had proposed to the finance ministry to expand the tax pool by levying charges on accounts held offshore by banks.

“We realised that more is being kept outside by banks than is required to meet international obligations,” he said.

Quarterly revenue for the period ending March 31 was up two percent on the targeted $818 million, he told the committee, adding that the economy was facing a gloomy future unless the country gets a stimulus package.

“We have exceeded the target by two percent notwithstanding the state of the economy. Things are not well out there and we have predicted that until and unless we can have some inflow of some revenue into the economy, we may be heading for a serious shrinkage of revenue,” Pasi said.

Revenue collections last year accounted for 29 percent of GDP against a regional benchmark of 24 percent, Pasi said.

He said the agency would lobby the central bank for tighter foreign exchange controls. The controls were relaxed in 2009, allowing travelling individuals to take $10,000 per trip outside the country, but Pasi said millions were being lost this way.

“We went from an extreme where there was too much control on foreign exchange to where there was really no control. Most of the cash exports have nothing to do with economic revival and these are the areas where we will be engaging the new governor because it’s Zimra which has to explain the discrepancy between the exports and imports,” Pasi said.

“Of the $7 billion imports, $4,1 billion is government imports which don’t pay duty, and then you take imports from COMESA, SADC and bilateral agreements which chew another chunk. Applying import duty on the whole bill would be unfair.”

Pasi also lobbied the committee to push for the reconstruction of the country’s busiest border post, Beitbridge, to ease congestion and minimise corruption at the port of entry.

He said a plan to embark on the project, whose completion was set for 2010 was stopped by former finance minister Tendai Biti because he was unhappy with some sections of the contract.

“The contract on Beitbridge was signed and (the contractor) moved on site and according to what we gathered they spent about $5 million in preparatory works such as temporary shelter they built. The then finance minister decided to stop it and he did not explain to us why,” Pasi said.

Zimra was not party to the negotiations of the contract but only supplied a plan for the reconstruction, he said.

 

COMMENTS

WORDPRESS: 18
  • comment-avatar
    Littledorrit 7 years ago

    Widen the tax net to trap the informal sector instead of repeatedly hitting on the tired formal sector driving more companies to the wall. The informal sector worth over a billion dollars. Get off your chairs ZIMRA instead of expecting everyone else to collect tax for you at their cost while you roam the passages of Kurima House looking pretty.

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    Zvichanaka 7 years ago

    Surprise surprise!

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    Tjingababili 7 years ago

    GO FOR THEM!

  • comment-avatar
    Nyoni 7 years ago

    MY QUESTION FOR THIS ZIMRA IS THIS. ARE YOU GOING AFTER THOSE IN POWER WITH OFFSHORE ACCOUNTS. THAT MONEY BELONGS TO THE PEOPLE OF ZIMBABWE CHETE. SO GET THAT MONEY OR ELSE VACATE YOUR JOBS AND GIVE IT TO MORE DESERVING PEOPLE.

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    John Thomas 7 years ago

    Fire Pasi and all of his ilk. Then we can all pay less tax

  • comment-avatar

    Pasi naPasi!

  • comment-avatar
    Roving Ambassador 7 years ago

    Fools. Flogging a dead horse.
    The solution is there,under their noses but ZANU will not dare take it because it will push them on of office.
    Rule of law.
    Human Rights and voting rights to all Zimbos.
    Property rights.
    Accountability and compensation of the aggrieved for government crimes.

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    Saddened 7 years ago

    As usual with this government,it is always someone else’s fault not theirs . The scourge of large scale corruption & inefficiency at the Beitbridge border has nothing to do with the buildings but rather with the people there. The many touts in collusion with the ZIMRA officials are in fact a major part of the problem of which I have had first hand experience on many occasions. The touts brazenly approach you after you have parked your car, offering to get your car & goods cleared for a fee of course. They push in at the front of queues to get served & I have yet to see them being turned away. For my part I have warned them not to push in ahead of me but this is the general rule. If they were not in collusion with ZIMRA officials how would they be able to operate like this. Put you own house in order Gershom Pasi then speak!

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      Yes! put your own house in order Pasi. We are enough. Methinks most of ZPF go to church but are too blind to see that God’s judgement is knocking at their door. I wonder what gospel they are listening too. ZPF how can you expect God to bless the economy when Zimbabwe, headed up by yourselves and some prosperity preachers, has become a nation of hatred, revenge, greed, corruption, lies, theft, injustice, unconfessed sin, vote rigging, bloodshed, intimidation, oppression, arrogance, idol worship and all the rest???? No repentance! no restoration!

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    Mixed Race 7 years ago

    Its easy to blame the former minister of finance because he is not there to defend his decision.How did you manage to collect 2% more when all private companies are operating at about 20-40% of their capacities?I hope that you did not kill the already dead people to recover funds from their dead bodies.
    You are quick to target offshore bank funds when you could get extra monies from these known friends of yours who have looted with total immunity so far.By the way you also got huge salary and allowances so it would be impossible for you to tax yourself heavily.

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    mvelase 7 years ago

    No country except for the mismanaged Zimbabwe is dependent on customs revenue collection from the border posts. This is a shame for such a wealthy country like Zimbabwe. Rich in mineral and agricultural wealth but alas being looted by rapacious ZANU PF hoodlums. Oh Zimbabwe!!!! Only way to right the wrongs in Zimbabwe is kick out these hoodlums using whatever means, seems dialogue and diplomacy has failed.

    • comment-avatar
      Ruramai 7 years ago

      Mvelase you are so right. Many people on this column are missing the point. Customs revenue ordinarily makes a minuscule percentage of any government’s revenue. As long as companies keep closing it means the tax base keeps dwindling. Company taxes and individual taxes constitute a huge percentage of government income.

      Add to this the fact that none of our new farmers pay taxes compared to the 4500 farmers from whom the land was taken. Each farm was an individual business unit which made immense contributions to the fiscus.

      We also have to realise that a lot of otherwise would be honest individuals end up cutting deals with Zimra stuff because our duty is way way too excessive and un-affordable. For example, duty on vehicle imports is a world record – it can go up to 115% of the purchase price. Meantime, politicians simply do not pay taxes when they import stuff, apart from the fact that their businesses do not pay taxes. Even Zanu p.f. companies such as Jongwe printers do not pay taxes.

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    If citizens are currently allowed to take $10,000 out of the country on each trip, then you’d better start policing the President first. Supposedly, on every foreign trip, he takes out cash worth hundreds of thousands and even millions at a time in his little black bag. It’s never seen again. He never brings any of it back into the country.

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    Mlimo 7 years ago

    Having looted all internal sources now loot the external who would ever want to invest in Zimbabwe?

  • comment-avatar
    Clive Sutherland 7 years ago

    Yes, Zanupf has killed the goose that laid the golden egg, idiots!

  • comment-avatar

    As usual everyone else to blame they r getting desperate and they have to safeguard their interests and to keep the minority in power.Their decisions are plan bad ,and this means the majority of Zimbabweans have to keep planning ahead ,because this government doesn’t want to do the right thing.Time will tell.Their priorities are so wrong,if you r ZANU PF the law doesn’t apply to you.This is the problem with a politicised judiciary ,police force and every facette of life in Zimbabwe.