The Zimbabwe Revenue Authority (Zimra) has threatened to take legal action against tax defaulters in an effort boost its dwindling coffers.
This comes as the national tax debt rose to 31 percent in the first quarter to $2,5 billion weighed by private entity debt as company closures and unemployment surged.
“We have not criminalised anyone yet but at this rate we may end up having to resort to court action,” Zimra acting commissioner general Happias Kuzvinzwa told delegates at the Zimbabwe National Chamber of Commerce annual congress in Victoria Falls last week.
“This, however, is not a route that we take lightly because the economy is not performing well and most companies cannot afford litigation,” he said.
Kuzvinzwa noted that Zimra was still engaging tax defaulters to negotiate payment plans, despite the lapsing of tax amnesty period in March this year.
“Yes, we have become notorious for garnish orders because it is the only effective method thus far to have companies approach us with their plans. We are saying come, let us reason together. We know things are tough, but after negotiations you need to stick with your payment plans,” he said.
The national tax collector has been missing its revenue targets since 2013 due to the worsening economic situation in the country, largely blamed on President Robert Mugabe’s populist and disastrous policies.
Latest government figures show that Zimra is struggling to restrain the local tax debt which rose by 30,9 percent from $1,97 billion at the end of 2015 to $2,58 billion by the end of the first quarter of 2016.
Of this debt, 0,18 percent is government debt, 26,77 percent municipalities, parastatals and state owned entities and 70,05 percent is private entities debt, according to the authority’s chairperson Willia Bonyongwe.
The present debt is made up of 52,1 percent principal debt, 20,2 percent in penalties and 26,6 percent in interest.
The tax collecting agency’s first quarter revenue performance was “poor” on the back of a harsh economic environment which saw the liquidity situation worsening.
Net collections were 84,1 percent of the targeted $ 861,6 million and recorded a nine percent decline on 2015 first quarter.
Gross collections for the first quarter amounted to $782 million and refunds consisting of Value Added Tax (Vat) and Customs Duty, stood at $57,1 million. This gave rise to net collections of $724 million. Daily News
