THE Office of the President and Cabinet has officially written to the National Social Security Authority (NSSA), informing the insurer of its proposal that it should transfer remittances to Zimbabwe Revenue Authority (Zimra) under a planned single payment system.
BY TATIRA ZWINOIRA
The letter proposed that NSSA remittances be submitted to Zimra under its account and later on be remitted back to NSSA.
A source close to the development says, another alternative being proposed was that NSSA “ride” on the Zimra software with NSSA contributions being deposited directly into the bank accounts held by the authority with various banks.
“In other words, Zimra will not have their hands on NSSA contributions,” said the source.
NSSA acting general manager, Hashmon Matemera, confirmed receiving the letter.
“I am aware of a letter from the Office of the President and Cabinet towards the ease of doing business and (introduction of) single payment system that we have not replied to as of yet,” he said.
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Matemera said he could not comment further, as the proposal was still in its infancy stages.
The source said the idea of creating a single payment system originated from the World Bank and was meant to help the revenue authority add to its existing revenue streams.
The idea was also aimed at helping investors set up business by paying all the necessary monies needed to one institution, thereby, halving the time it takes in setting up a business.
However, having NSSA submit pensions towards that single payment system to help with the ease of doing business has no correlation in a business setting up.
The move to consolidate NSSA contributions under Zimra will potentially have a negative impact on retirees, as timing of payments or receipts into the fund is a critical determinant of ultimate benefits payable to retirees. Any delays will have a multiplier effect on the benefit to retirees.
The proposal is expected to cost pensioners’ 10% of revenue and a multiplied cost over time in terms of the actual benefit paid to retiring pensioners.
“Under this proposed arrangement, NSSA will lose the right to independently manage its affairs as it can only plan after confirming with Zimra, a situation that invites expensive inefficiency. Since Zimra will be responsible for collection of NSSA revenue, it follows that NSSA will lose direct control of the accounts receivables for the pension fund,” the source said.
