By Phillimon Mhlanga
The country’s tax collection agency, the Zimbabwe Revenue Authority (ZIMRA), has intensified tax audits as part of efforts to boost revenue collections.
Government, which is heavily reliant on tax, has been struggling to pay its workforce on time, forcing Finance and Economic Development Minister, Patrick Chinamasa, to stagger salary payments.
ZIMRA board chairperson, Willia Bonyongwe, told The Financial Gazette on the sidelines of a tax seminar held in the capital last week that the tax collector was on a drive to increase collections.
She said tax collection had improved, even exceeding targets after a crackdown and audit of companies for tax evasion.
In the first half of 2017, Zimra collections amounted to $1,7 billion, up from $1,55 billion in the same period of 2016.
Bonyongwe warned of severe penalties for companies that violate the country’s tax laws by failing to remit taxes.
“There is a lot of pressure on ZIMRA because the economy is not doing well. We have liquidity problems and production is not increasing. So what do we do?” Bonyongwe asked.
“The pressure is on ZIMRA now to collect as much as possible. We have increased audits because we want to know the conduct of clients. We are now looking at historical transactions, going back to six years and the current ones. For the historical transactions, we accept payment plans.
“We are seized with this and we are going back to about six years. We need to know what the assessments and calculations are.
“We need to know what the figures are. This is a very serious issue for government and ZIMRA. From where we are coming from and where we are going, I am sure there will be a win-win situation.”
“Many clients are not known to ZIMRA but they go to holidays so often. So, we are saying that if you are well known to Emirates, you should also be known to your taxman. We know money is there in people’s homes but the issue is they are reluctant to pay taxes. They play catch me if you can game.”
She said Zimbabweans did not prioritise tax obligations.
“I think people should just be honest. They are paying everyone every month, but don’t want to pay ZIMRA its dues. The rightful place is to pay taxes on time and in full, then people will not have problems with ZIMRA.”
Chris Zifudze, regional manager for ZIMRA Region 1, weighed in, saying: “The reason ZIMRA has increased audits is to get assurance that clients have complied with what is in the law. Some understate declarations and some don’t even want to pay.
“An audit is an opportunity to clear one’s name. If one is a clever taxpayer, one should declare or account for revenue not declared in full. Then a lesser interest, in this case of 10 percent, will be charged. We are encouraging everyone to be compliant.”
Zimbabwe’s economy has become largely informal, making it difficult for ZIMRA to collect taxes.
Many companies have closed and many more continue to shut down due to operational challenges, reducing the tax base.
Steve Matoushaya, a tax director at audit and advisory firm, KPMG Zimbabwe, said: “Many of our clients are saying that they are not happy with the never ending audits from ZIMRA. Despite that, companies would have been audited by external auditors, ZIMRA audits take much longer and it appears they are auditing every single expense. Clients are complaining about this.”
Dawn Properties finance director, Valerie Muyambo, said engaging a tax consultant on tax disputes was a “source of harassment” from ZIMRA.
“If one goes with a tax expert because one would not be a tax expert, it would be a source of harassment. ZIMRA officers would send messages or call saying so you can afford a consultant and you are not able to pay ZIMRA. This is so disturbing,” said Muyambo.
Bonyongwe said: “What we don’t want is for our officers to harass clients but to be firm. We don’t want bullies who harass clients but we want firm tax collectors. The Financial Gazette