HomeBusinessZimra tightens noose on tax evaders

Zimra tightens noose on tax evaders

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The Zimbabwe Revenue Authority (Zimra) is making strides to increase tax evasion penalties to punish tax evaders, amid revelations the taxman is currently collecting 30% of the prospective tax revenue.

BY FIDELITY MHLANGA

Zimra board chairperson Willia Bonyongwe
Zimra board chairperson Willia Bonyongwe

Zimra board chairperson Willia Bonyongwe yesterday told delegates at the EY tax seminar that there were efforts to increase tax penalties for tax evasion as a result of failure by businesses to pay tax.

“We are working in the next budget to increase the penalty for evasion like I said some people have got fiscal gadgets which they are not using. The majority of people if you go to Borrowdale Village, Harare’s central business district, Arundel, and Westgate you find that a lot of people are not fiscalised. They don’t have anything which they are sending to Zimra and that is where you find instances where our officers approach them for bribes or things like that,” Bonyongwe said.

Failure to acquire and install fiscal devices attracts penalties of $25 per point-of-sale and for each day that the VAT registered operator remains in default.

She added that the taxman was making strides to expand the tax revenue base by reaching out to every business in the country to pay tax.

“People in Zimbabwe generally don’t pay tax. I would like to believe that what we collect is probably at most 30% and that is a pity because we cannot reduce the level and rate of tax. What we are trying to do is to reach out to everybody big and small to make sure that we actually have a certain level of compliance,” she said.

This comes after Zimra’s annual gross collections amounted to $3,462 billion last year.

Using the above figure as a benchmark it, therefore, means the taxman is supposed to collect $11,5 billion annually.

“We believe that we are just collecting the tip of an iceberg and the whole iceberg is under and we are collecting the tip and I think if we could collect even double on what we are doing now the service delivery will be much better,” she added.

The Zimra chairperson said government was heavily relying on revenue obtained through taxation, urging people to comply voluntarily.

“This leaves a burden on a fiscal policy and on taxation. I think and am not sure about the figure, but my own estimation is that over 80% of the revenues of government right now are coming from taxation and that means it becomes a very important part than normal in the development of our country and in the ability of the government to actually provide adequate service delivery,” she said.

Bonyongwe said there was need to enforce stiffer penalties on tax evasion to ensure maximum tax collection in order to sustain the economy.

She said after the rolling out fiscal gadgets, management was pursuing a new virtual system to connect companies and Zimra.

“I am told by management that they are pursuing a virtual system which does not require a gadget or much money and as a board we are excited by that we think it will revolutionise the collection of taxes in the sense that we are able to collect more. Some people were waiting for gadgets but with the virtual system there is no need to wait,” she said.

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