By Prince Sunduzani
The Zimbabwe Revenue Authority (Zimra) has called on businesses to embrace voluntary tax compliance saying levying penalties on defaulting clients is not an effective instrument.
The private sector owes close to 80 percent of the estimated $4 billion tax debt, which has been growing over the years despite aggressive enforcement by the authority.
Zimra Commissioner General, Ms Faith Mazani, says the tax watchdog was intensifying its drive to promote voluntary compliance through educating tax payers in line with international practices in a bid to contain the ballooning tax debt.
In an interview on ZBCtv, she said compliance levels in the country were critically low with only 300 000 tax payers fulfilling their tax obligations. As such, she said, Zimra was rolling out a number of programmes to deal with compliance issues.
“Our compliance levels are very low. This is actually shown from the number of tax payers that we have. We have about 300 000 tax payers but most of them are not compliant. We want to ensure that we educate, support our tax payer and enforce compliance,” she said.
“We are going to be using third party information, educate them to try and improve compliance levels. Voluntary compliance is the best practice in tax administration because we don’t have the resources and time to audit everybody.”
As a result, Ms Mazani said, Zimra was going to invest a lot in providing information and introducing some of the programmes that have been recommended by international organisations on co-operative compliance. The tax administrator last month exposed private sector players who owe 80 percent of $4,2 billion debt. Ms Mazani urged businesses to take advantage of the tax amnesty window granted at the beginning of the year to resolve their arrears.
The amnesty window expires next month.
“Through our audits and investigations, we have identified a number of tax payers who owe. We impose penalties and those debts are not being paid. 80 percent of our debt is owed by the private sector,” she said.
“We have an amnesty that was declared by Government and it is only up to 11 June so I want to encourage taxpayers to utilise this opportunity.”
Ms Mazani outlined the organisation’s key strategies, which include addressing people issues, improving processes through technology, developing strategic partnerships with tax payers and stakeholders and reforming the organisation through projects and programmes that ensure better service. The Chronicle