The Zimbabwe Revenue Authority (ZIMRA) has lost its bid to collect US$46 million in tax from the Zimbabwe National Road Administration (ZINARA) for the rehabilitation of the Plumtree-Mutare highway, Transport and Infrastructure Development Minister, Obert Mpofu has revealed.
ZIMRA had descended on the government’s road administrating agency seeking to collect US$46 million as tax arising from the project, which is being funded by the Development Bank of Southern Africa to the tune of US$206 million.
The funding is in the form of a loan extended to government.
In a bid to collect the tax, ZIMRA had proceeded to issue a garnish order on ZINARA’s bank accounts, collecting US$46 million in total.
But Mpofu has now disclosed that ZIMRA and ZINARA have struck a deal whereby the taxman will reimburse the road administrator the US$46 million.
“There has been a major breakthrough in that deal. We have reached an agreement as stakeholders to the deal that will see ZIMRA reimbursing the money that it had taken as tax back to the project. This is a result of enormous discussions that we did institute in an effort to solve a potentially difficult situation that we were faced with,” he told the Financial Gazette.
Mpofu said ZIMRA and ZINARA had previously worked in competition instead of complementing each other’s efforts.
Following the discussions, the two government bodies will now complement each other in implementing government policy.
“We had a situation where these two bodies had failed to find each other in as far as addressing and dealing with challenges that arise when implementing government projects that have outside financing (is concerned),” he said.
“I am glad that they have finally found each other and I am sure that money will soon be given to ZINARA so that the project can be completed,” noted Mpofu, adding that the money that had been garnished by ZIMRA was “too much” to a point where it had threatened the completion of the project.
“If you look at it, some parts of that project are yet to be completed. We were supposed to have commissioned that road long back. But because of this money issue, which is too much by any standard, we had some serious delays in the project’s completion. Some of the stakeholders in the project threatened to stop working because there was no money and that is why we are yet to complete the project,” Mpofu added.
The rehabilitation of the 820- kilometre Plumtree-Bulawayo-Harare-Mutare highway was being done by Infralink, a joint venture between ZINARA and Group Five International of South Africa.
ZINARA has a 70 percent shareholding in the joint venture while Group Five International owns 30 percent.
The road rehabilitation project also includes the construction of toll plazas. Financial Gazette
