By Farayi Machamire
In line with its new economic thinking, government must have checks and balances in place to guard against unscrupulous investors who may want to take advantage of its “Zimbabwe is open for Business” mantra.
This was said by the commissioner-general of the Zimbabwe Revenue Authority (Zimra), Faith Mazani, when she addressed parliamentarians during a workshop held in Harare last Wednesday.
Mazani said revenue collector expects incoming investors to contribute meaningfully not only towards its tax revenue base but also in creating employment and economic development by bringing in new technologies.
“There should be a level playing field for existing businesses to ensure equal opportunities for both local and foreign investors,” said Mazani.
“There is need to balance revenue collection efforts and ‘open for business’ opportunities. As a country, we need to be aware of the fact that tax concessions, which are granted to investors, tend to erode the revenue base. Therefore, checks and balances to ensure that concessions extended to investors do not outstrip the envisaged benefits to the economy must be employed.
“For example, some companies in sectors such as mining are in perpetual losses while also receiving refunds. Some companies close at the end of the tax period and come in under new names for further concessions,” added Mazani.
Zimra said non-tax measures need also to be considered to lure investors.
During the first quarter of this year, tax expenditure or revenue foregone amounted to $1,019 billion, which was 47,80 percent of the total potential revenue of $2,132 billion for the same quarter.