By Prosper Ndlovu
Zimbabwe Revenue Authority (Zimra) commissioner general, Ms Faith Mazani, has expressed concern over delays in resolving tax disputes in courts, which she said frustrates efficient revenue administration.
Speaking during a panel discussion on the impact of digitalisation on taxation at the ongoing 4th International Conference on Tax in Africa here yesterday, she said although Zimra has taken several tax cases to court, the legal process has been slow.
The tax authority is owed more than US$4 billion in unpaid taxes by individuals and corporates, some dating back to the US dollar era. With minimal results from moral suasion towards voluntary clearance of the debts, some of the cases have been taken to court as the authority seeks to recover the funds.
“We have taken many cases to court but do they have the capacity to handle them? We have about $4 billion in tax debts but courts take more time to resolve these,” said Ms Mazani.
“For instance, we have a case with an international e-commerce company but it is dragging.
“Should it go to an international court, are we going to be able to tackle it?”
She said increased political will was needed towards capacitating the tax authority to acquire requisite technical infrastructural capacity to fulfil its mandate, especially at a time when the economy is embracing digital transactions, which come with unique compliance challenges.
Ms Mazani said efficient tax administration was also being blighted by corruption and conflict of interest, which exposes lack of integrity even among officials at higher levels.
She lamented the weak bargaining power in the negotiation of certain public contracts, which often exclude taxation components but would have been signed by policy makers.
This deprives the economy of the critical revenue it needs to grow, she said.
Ms Mazani, who is among the top regional panelists discussing the impact of digitalisation on taxation in Africa, said despite the challenges, digitalisation presents an opportunity to tap into relevant data using the audit trail of transactions.
This need increased investment in capacity building to fully utilise the emerging technologies so as to improve tax systems across Africa. She said Zimbabwe was already grappling with the digital economy reality and measures were being put in place in response.
Ms Mazani noted that recent cash shortages and currency volatility in the country had opened floodgates for digital innovations as society seeks alternatives.
She made reference to aggressive digital business innovations through products such as Econet’s Vaya logistics, mobile money, online shopping and others, which have virtually taken space in all spheres of life from health, agriculture and remittances.
Other businesses have also grabbed opportunity across board in a bid to expand market and consumer convenience.
In view of this, Ms Mazani said Zimra needs more support in getting equipment and setting up proper digital infrastructure, develop and recruit skilled technical personnel to tap into the vast digital data for tax purposes.
She said the tax authority has successfully implemented the digital fiscalisation programme but not in a position to fully utilise the data in view of technical constraints.
The Zimra boss said the country’s revenue performance level remains on the positive side ahead of others in the region given that the country has made surpluses this year.
She said the two cents tax has also become helpful in widening tax base and bridging the compliance gap among the informal sector.
The African Tax Administration Forum (ATAF) is hosting the conference, which coincides with the organisation’s 10th anniversary, and runs under the theme: “Innovation – Digitalisation and Harnessing Technology to Improve Tax Systems”. The Chronicle