Page Nav




Classic Header


Top Ad

Advertise Here

Breaking News:


Garnish Greenlight: Taxman Gets Court Authority to Recover $2 Billion

The Zimbabwe Revenue Authority will garnish the bank accounts of defaulting taxpayers to recover US$2 billion starting January 2017, but in...

The Zimbabwe Revenue Authority will garnish the bank accounts of defaulting taxpayers to recover US$2 billion starting January 2017, but industry and commerce are pleading for a stay of execution.

Taxpayers owe Zimra US$2 billion and sources say the authority is frustrated that offers of payment plans, and removal of interests and penalties have proved fruitless.

The tax collector also says it is losing almost US$1 billion yearly to smuggling, tax evasion and tax concessions. A top Zimra official told The Sunday Mail Business on condition of anonymity that “there would be gnashing of teeth come January 2, 2017”.

“We have tried to engage taxpayers who owe us and arrange payment plans, but they have defaulted on such payment plans while others never bothered to come to make arrangements with us. The consensus in Zimra now is that we should go ahead and garnish accounts of all those who owe us.
Zimra Will Garnish Accounts in 2017 

“We cannot continue like this. Taxpayers are investing in brand new cars and building astonishing houses in leafy suburbs yet they claim there is no money to pay taxes,” said the official.

Zimra board secretary and director for legal and corporate services Ms Florence Jambwa said they had lined up several methods to recover the US$2 billion owed by taxpayers. In emailed responses to questions from this newspaper, Ms Jambwa said Zimra would negotiate for “tax payment plans with clients” and send “reminders” to clients on a regular basis to promote tax compliance.

“Garnishee orders are used only as a last resort to collect outstanding taxes when all other strategies, include negotiations, would have failed,” said Ms Jambwa. Two years ago, Government — through the Finance Act (No 2) of 2014 — made provision for an amnesty on penalties, interest, and prosecution for the non-payment and other irregularities in connection with all taxes administered by Zimra.

The amnesty covered any non-compliance that occurred between February 2009 and September 2014, to enable non-compliant businesses to regularise their tax issues. It is understood that few companies took advantage of the amnesty despite a three-month extension.

Confederation of Zimbabwe Industries president Mr Busisa Moyo urged Zimra to come up with “persuasive” revenue collection methods as garnishing accounts would cripple companies.

“Instead of cutting down the whole tree, Zimra should nurture these businesses so that it can enjoy the fruits all year round. Many of our companies are operating at less than 10 percent capacity utilisation; therefore they cannot borrow money to repay Zimra.

“Zimra should just stick to these payment plans as the situation on the ground is not allowing the companies to abruptly pay old debts. Yes, businesses should pay taxes but we should have reasonable terms on how to pay our respective tax obligations,” said Mr Moyo.

Zimbabwe National Chamber of Commerce president Mr Davison Norupiri urged Zimra to “bear with us” as economic conditions were tight. “We should reach an agreement as iron fist rules won’t take us anywhere. The move to garnish accounts will do more harm than good.

“When more companies close as a result of that move where will they get the money from? As business we encourage each other to pay taxes but we need time to pay what we owe them and it’s not a one year event as it takes time to pay this debt,” said Mr Norupiri.

There are concerns that Zimra is leaning heavily on SMEs in particular, when they require hand-holding to grow. Finance and Economic Development Minister Patrick Chinamasa has proposed waiving the requirement for SMEs to account for output tax from the deemed date of qualification for registration.

The moratorium, which will be effective for six months beginning January 1, 2017, will apply to SMEs whose turnover does not exceed US$240 000 per annum and who voluntarily register for VAT with Zimra.

Minister Chinamasa also proposed to review presumptive taxes downwards and to change the payment period from a quarterly to monthly basis with effect from January 1, 2017. The measures are expected to promote SMEs’ voluntary tax compliance.

Government says slower economic growth has undermined overall performance of public finances this year, with cumulative revenues from January to October 2016 performing 1,5 percent below previous year levels and 9,8 percent lower than budgeted estimates.

Minister Chinamasa said the 9,8 percent under-performance in revenue for the period January to October 2016 left collections at US$2,876 billion against a target of US$3,158 billion. This resulted in a budget revenue shortfall of US$282,5 million. - Sunday Mail 

Tinzwei Is A Worth Voyage For Those In Pursuit For Up-To-Date World Events.

Read More At The Online Coronavirus Portal Or Use The 24-Hour Public Hotline:
South Africa: 0800 029 999 or just Send Hie to 0600 123 456 on WhatsApp

No comments