The Zimbabwe Revenue Authority (Zimra) has been surpassing monthly collection targets. In this question and answer interview, Zimra’s acting commissioner-general, Happias Kuzvinzwa (HK) tells NewsDay (ND) business editor Ndamu Sandu on the measures the authority has put in place to increase collections.
ND: What has been driving the increase in net collections and what measures have you put in place to increase compliance and collections?
HK: Improvements in revenue collections are a result of a number of measures that the Zimra is implementing to enhance revenue performance. These measures include, but are not limited to the following;
l Intensive fight against tax and duty corruption, as a way of plugging any revenue leakages.
l Implementation of the electronic cargo tracking system to curb transit fraud by monitoring the movement of transit cargo from point of entry to point of exit.
l Acceleration of the pace of rolling out the fiscalisation programme, which involves acquisition, installation and connection of fiscal devices to the Zimra server by value added tax (VAT) registered operators.
l Improved engagement of taxpayers by Zimra to equip them with knowledge pertaining to their rights and obligations under fiscal laws.
l Enforcement activities by Zimra in the form of compliance checks, audits and investigations to ensure that taxpayers comply with fiscal laws
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l Improvements in operational efficiency and effectiveness of Zimra though automation and business process re-engineering ND: Are you happy as Zimra with the levels of tax collections?
HK: Zimra’s mandate includes the collection of revenue on behalf of the State, and where collections outweigh set targets, it shows that measures being put in place are yielding positive results. However, in line with the authority’s vision to be a beacon of excellence in the provision of fiscal services and facilitation of trade and travel, one of Zimra’s goals is to continue improving the level of tax compliance in the country and increase revenue collections.
ND: What is the contribution of SMEs to collections after they registered under the moratorium?
HK: The moratorium for the registration of small to medium enterprises (SMEs) expired on June 30, 2017 and saw 12 992 new registrants being added to the tax base. SMEs registered for tax purposes, just like any other taxpayers, have obligations under various tax heads such as pay as you earn, value-added tax (VAT), corporate income tax and any other applicable taxes.
ND: What is your response to assertions that our penalties are too excessive?
HK: Penalties are provided for in terms of the laws that Zimra administers and are levied on non-compliance (such as late or non-payment of taxes or failure to submit tax returns) as a way of deterring undesirable behaviour. To this end, affordable penalties cease to act as a deterrent to non-compliance. Zimra always urges its valued clients to avoid penalties and interest by paying taxes and duties on time and in full and submitting the required returns within stipulated timeframes.
ND: How do you compare our tax regime to other countries in the region?
HK: Zimra benchmarks with other countries in the region and is always moving in line with best practices. A lot of research is conducted by the authority so that the taxation laws remain contemporary.
ND: Why does Zimra want to be paid in 30 days, when companies are paid by debtors in 60 to 90 days? The law provides for payment of tax on receipt of sales proceeds. Why is Zimra not following the law when it demands payment in 30 days?
HK: Zimra administers various tax laws with specific provisions relating to each revenue head and the authority implements the provisions of the law in collecting revenue. It is assumed that the question is directed at the VAT provisions. The VAT Act states that tax is accounted for on invoice or payment date, whichever occurs first. Payment date in respect of the tax due for a certain tax period is prescribed in the Finance Act [Chapter 23:04]. Zimra, therefore, operates within the confines of the law.
ND: Can you give an update on the lifestyle audits?
HK: Lifestyle audits are a form of ongoing compliance checks that are conducted by the Zimbabwe Revenue Authority to verify whether individuals are paying taxes that are commensurate with their taxable income. There is, therefore, no end to the audits as individuals’ income levels change from time to time.
ND: There has been concern that cargo tracking on transit truckers has created inconveniences and some truckers were avoiding Zimbabwe. How are you going to ensure that truckers do not avoid Zimbabwe?
HK: The cargo tracking system has brought many advantages to both the Authority and the transporters in that cargo in transit is monitored real-time from point of entry to point of exit. This has assisted in curbing transit fraud by ensuring that cargo that is declared to be in transit to neighbouring countries is not illegally offloaded for consumption in Zimbabwe. The system has also assisted in improving the security of the cargo, as it is monitored real-time as it will be transiting through Zimbabwe
