ZIMRA boss, Geshom Pasi.
KADOMA — The Zimbabwe Revenue Authority (ZIMRA), which is owed more than US$1,4 billion by businesses and individuals in unpaid taxes, has successfully lobbied the Ministry of Finance to grant it permission to engage defaulting firms to enable them to meet their obligations, an official has revealed.
The tax collector has previously used draconian means to force tax compliance, including even garnishee orders on defaulting companies’ accounts.
ZIMRA’s technical services manager responsible for domestic taxes, Alick Mutandiro, told delegates at last week’s Zimbabwe Building Contractors’ Association (ZBCA) annual conference that the taxman had secured permission from government to look at tax defaulters’ cases on an individual basis, with full discretion to enter into tax payment arrangements with businesses that show willingness and ability to settle their dues.
“The minister has allowed the commissioner substantial discretion in giving the tax clearance certificates even to those businesses that still owe . . . the only thing (that is needed) is that there has to be arrangements that the commissioner agrees to,” Mutandiro said.
ZIMRA is headed by Gershem Pasi, who is the commissioner general.
He said because of the harsh economic environment that most businesses in the country were exposed to, it had been observed that denying companies the sine qua non ITF 263 tax clearance certificate was counter-productive as it only worsened affected companies’ plight.
As a result, with the Finance Minister Patrick Chinamasa’s approval, ZIMRA had decided that any businesses operation that needed a tax clearance certificate should be granted one, provided it made an application to ZIMRA accompanied by a reasonable tax payment plan.
These tax clearance certificates would cover limited periods to allow the companies to trade and possibly return to viability.
Until now, ZIMRA strictly gave tax clearance certificates only to businesses that were tax compliant.
For a company to be able to apply for a tender, or get its invoice processed, a tax clearance certificate was mandatory.
“We have decided to look at each case separately,” Mutandiro said.
He said the move was part of a raft of measures that the authority was implementing to ensure tax compliance as well as weeding out corruption within ZIMRA.
Mutandiro said it was common knowledge that the taxman was one of the most hated and feared persons since time immemorial and ZIMRA — which has just embarked on a journey to attain ISO certification status — was determined to improve the way it is perceived by the public.
The ZIMRA executive explained to the delegates that while it was indeed true that the authority charged harsh penalties on tax defaulters, the penalty was not always 100 percent of the outstanding tax but varied from case to case depending on mitigating factors and the behaviour of a defaulter.
He said the fact that the public did not know that the penalty varied had exposed them to some rogue ZIMRA elements who demand bribes claiming that they could facilitate low tax penalties even in cases where mitigating factors effectively removed the possibility of a penalty.
Mutandiro said Chinamasa had empowered taxpayers to charge ZIMRA interest where tax refunds were delayed. Some firms are owed lots of money in tax-refunds which have been outstanding for years.
“ZIMRA has vowed that they will not pay any interest to a taxpayer who makes that claim, but that interest will be paid . . . it will be paid by that officer who would be responsible for that delay . . . officers will be responsible for their actions,” he said.
He also explained that firms which owed ZIMRA but are also owed by government and its departments, could apply to have those government debts converted into tax credits.
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