THE lack of stakeholder engagement ahead of the introduction of new tax heads has sparked concern among tax experts, who argue that this top-down approach is fuelling taxpayer resentment and hindering voluntary compliance.
BDO Tax and Advisory Services tax director Peter Dube said there was a need for a wide range of consultations and negotiations with the right stakeholders to make the right decisions to encourage compliance.
Dube made these remarks during a panel discussion on the updates of the current tax developments in the country at the 8th annual tax conference in Victoria Falls last week.
“If you look at South Africa, the IMTT [intermediated money transfer tax] was proposed in 2021 and it took them two years to go through discussions with several stakeholders until it was gazetted.
“It is different from us here in Zimbabwe,” he said.
“The laws are made as we go and they sort of cause resistance within the taxpayers because they cannot own the measures.
“There is a need to have a wide range of consultations and there is a need to strike a balance. Stakeholders’ engagement is very important and we must negotiate in good faith.”
Dube also complained about the lack of consistency on some of the tax measures, making it complex to enforce compliance.
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“Sometimes there is no consistency in the regulations as some of these taxes were put in place as temporary measures but now, we have them permanently enforced without consultations,” he said.
“So, the government sometimes is faced with a situation where it is good to then introduce taxes that way but this becomes a challenge when it comes now to enforcing compliance.”
Presenting on the same panel, WTS Tax Matrix Academy CEO Marvellous Tapera said there was a need for a unified tax rate as the current tax regime makes the country a highly taxed jurisdiction.
“The problem is that we have many taxes piled on top of each other. There are so many changes involved. There are levies you have to talk about. There are issues about IMTT that you have to talk about,” Tapera said.
“So, when added together, Zimbabwe might appear as a high-tax jurisdiction because of these many changes.
“We need to have a unified rate to some extent because our problem is the crisis of many surrogate taxes compared to direct taxes.”
He also bemoaned continuous tax changes, noting that they were impacting sustainability and investment plans.
“I do not want to blame Zimra [Zimbabwe Revenue Authority] because they are only doing their job.
“I think we need to relook at the overall tax structure. Zimra has taken the position of quasi-fiscal legislator,” Tapera said.
“What do I mean by that? How many public notices have you seen in the last couple of days?
“There are so many of them. So, what is the problem? The rules are not straightforward; they are complicated and always changing, and that creates problems in terms of sustainability and investments.”
He also noted that the introduction of the new local currency was abrupt, impacting financial reporting and compliance with international reporting standards.
