Zimra launches blitz on traders

THE Zimbabwe Revenue Authority (Zimra) has launched a massive blitz targeting all traders who continue to dodge their tax obligations by not installing fiscal devices and connecting them to its servers.

Fiscalisation became legally enforceable in Zimbabwe after Statutory Instrument 104 of 2010, was gazetted on June 8, 2010. Fiscal tax registers record financial transactions from businesses and transmit the data in real time to Zimra, and are therefore seen by Government as central to widening the revenue collection base.

In a statement yesterday, Zimra reminded all operators registered for Value Added Tax (VAT) purposes to acquire and install fiscal devices in tandem with the terms of VAT (Fiscalised Recording of Taxable Transactions) Regulations, 2010.

The regulations were published in SI 104 of 2010.

All businesses generating more than $60 000 per year – an average of $5 000 per month – are required to have electronic fiscal devices from January 1, 2017. Deadline for installing the devices and connecting them to the Zimra server is December 31, 2017.

"Operators who have not yet complied with these requirements are being reminded of the provisions of Statutory Instrument 153 0f 2011 dated 31st December 2011. The legislation makes it an offence if one fails to comply with the fiscalisation requirements by the due dates.

"Zimra has already commenced an exercise to follow up on all operators whose details show that they are yet to install fiscal devices.

"You are kindly urged to co-operate with the Zimra staff as they carry out their duties and respond promptly to communication regarding the fiscalisation requirements," said Zimra.

Operators that are found to be flouting the law after the deadline are liable to penalties of $25 per point of sale and for each day they remain in default. The penalty is applicable up to a maximum period of 181 days.

The law also says if any operator continues to side-step the law, they would be found guilty of an offence and would be liable to a fine not exceeding Level 7 or to imprisonment for a period not exceeding a year, or both such fine and imprisonment.

There have been concerns by businesses that it was difficult to acquire fiscal machines because of the high cost, which ranged between $1 200 and $1 700, largely due to lack of competition.

Zimra was approved as a fiscal device supplier on June 23, together with eight other companies. The national tax collector is selling its electronic cash registers for $350 and electronic fiscal printers for $500.

According to General Notice Number 307 published in the Government Gazette of June 23, 2017, other fiscal device suppliers announced are Just I.T; Global Horizons (Private) Limited; Rumikon Computers (Private) Limited; Microwarehouse (Private) Limited; Axis Solutions (Private) Limited; Cortech Solutions (Private) Limited; Fiscal Revenue Solutions (Private) Limited and Fiscal Support Services (Private) Limited.

The initial list published in the Government Gazette of July 29, 2011 had six approved suppliers.

In terms of the VAT (Fiscal Recording of Taxable Transactions) Regulations, 2010 (Statutory Instrument 104 of 2010), the approved firms are authorised to manufacture, supply or distribute fiscalised electronic tax registers, fiscalised electronic printers and fiscalised electronic signature devices.

However, there are concerns that some of the suppliers may have challenges with providing after sales services, in particular, for imported devices.

In the face of softening consumer demand and a constrained business environment for companies, VAT collections on local sales amounted to almost $324 million in the first six months of the year, against a target of $330,3 million.

VAT collections on local sales were only outperformed by individual tax which was $347 million in the first six months, underlining its centrality to revenue collection in the country.

In his annual budget review and outlook for 2017 statement in Parliament recently, Finance and Economic Development Minister Patrick Chinamasa said cumulative VAT collections amounted to $963,2 million last year, against a target of $955 million.

The figures represent a positive variance of $8,2 million. With expectations high that tax revenue would top $3,7 billion this year due to increased tax compliance, fiscal devices are expected to help plug revenue leakages and propel collections.