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Tax reforms loom

Africa Moyo Senior Business Reporter
The Zimbabwe Revenue Authority (Zimra) has called on taxpayers to take advantage of the 2019 national budget consultations that are expected to commence soon, to propose changes, if any, to some sections of the tax system to encourage voluntary compliance.

This was said by Zimra Commissioner General Ms Faith Mazani last week during a breakfast meeting organised for players in the telecommunications sector.

Ms Mazani said at the moment, compliance levels were “at a low level”, resulting in a ballooning tax debt.

As at May 31, 2018, Zimra was owed $4,3 billion by taxpayers and Ms Mazani said it was almost “uncollectable”.

The principal debt was $2,2 billion while penalty was just over $981 million and interest accrued was $1,18 billion.

Ms Mazani, a firebrand and internationally respected tax officer, suspects some taxpayers are defaulting on their tax obligations due to the policy system.

Said Ms Mazani: “As we start our engagements with the Ministry (of Finance and Economic Development) towards the budgeting process, we realise that there are a number of areas where our tax system may require to be reviewed and revised.

“I invite you to sit down with us and highlight those areas where we need to change our laws.

“Let us make a united front in coming up with policies that are going to generate activity in our economy and expand our tax base.”

Some taxpayers are expected to raise issues concerning garnishing of defaulting taxpayers’ accounts in a bid to recover tax debt.

A number of companies have had their operations seriously affected by garnishee orders, while others ended up closing shop after all their money was blocked by Zimra, throwing employees on the streets.

Ms Mazani said it is not Zimra’s intention to “kill the goose that lays the egg”.

This has seen the national tax collector recently announcing that it is now abandoning its heavy-handedness when dealing with defaulting taxpayers.

Ms Mazani said Zimra is now moving towards sustainable taxation, where business is able to pay their tax dues but also remaining operational in order to create other positive externalities like employment creation and reduction of poverty.

Allowing firms to pay their taxes and remaining operational is expected to contribute positively to the sustainable development goals.

“ . . . we have taken a different approach to our tax administration and as we engage with specialised sectors like the telecommunications sector, we are going by an approach of cooperative compliance.

“Under cooperative compliance, we realise as Zimra that we have a lot learn from the stakeholders that we are serving and assisting in meeting their tax obligations. We also realise the special qualities and circumstances of most of the industries that participate in this particular sector.”

 

Source : The Herald

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