MAYOR Logistics’ appeal contesting the payment of $3 235 814 in value added tax (VAT) and income tax to the Zimbabwe Revenue Authority (Zimra), was yesterday struck off the roll after the Supreme Court ruled the matter had been brought before the judges using the wrong rules.
BY CHARLES LAITON
Supreme Court Judges of Appeal Justices Paddington Garwe, Vernanda Ziyambi and Antonia Guvava refused to entertain Gokwe-Nembudziya MP Justice Mayor Wadyajena’s appeal saying the matter had been filed pursuant to Rule 29 of the court instead of the Miscellaneous Act.
Mayor Logistics allegedly owes Zimra the claimed amount but the firm approached the courts seeking to stop the taxman arguing the figure claimed was unjustified and the calculations were wrong and inaccurate.
In his argument, Wadyajena says Section 6 of the Tax Act precludes Zimra from charging VAT on a payment done, but that VAT can only be charged for the furtherance of business, adding he could not be charged that exorbitant amount.
It is the company’s argument that Zimra failed to appreciate its business relationship with Sakunda Energy. Mayor Logistics purchases fuel from Sakunda and pays for it in kind through providing transportation services.
In the founding affidavit by Mayor Logistics’ accountant, Farai Mhangwa, the firm argues Zimra was wrong in interpreting the relationship as a taxable transaction.
Mhangwa further argues that Zimra should make a clear distinction between the two transactional relationships between Mayor Logistics and Sakunda, which involves the provision of transport services and the purchase of fuel.
But in his founding affidavit, former Zimra Commissioner-General Gershem Pasi opposed Mayor Logistics’ appeal arguing the authority was empowered by the tax regulations to assess the arrears and to collect them, adding Mayor Logistics actually offered transport services to Sakunda and as such it should be taxed.