News / National
Zimra officials undergo training
10 Feb 2017 at 05:24hrs | Views
Government is training Zimbabwe Revenue Authority (Zimra) officials on how to closely monitor accounts and analyse financial statements of conglomerates operating in Zimbabwe in a bid to curb externalisation of foreign currency, Finance Minister Patrick Chinamasa said yesterday. Without naming any company, Minister Chinamasa said Treasury had come across instances where foreign currency was being spirited away from Zimbabwe in various ways including payment of "excessive" management fees.
He said in some cases management fees (periodic payments of costs of having assets professionally managed) were as high as 10 percent. "We are training our Zimra staff to understand and analyse accounts and books of multinationals. We are trying to zero in on where there is capital outflow," he said.
"So far what in fact has come up from that training is that the area we need to look at in financial statements of multinationals are what they charge as management fees. Is the percentage they are charging African countries the same as what they charge everywhere else in the world?"
Minister Chinamasa added: "The other area is of course on royalties. Those are areas where I have encouraged Zimra to build capacity so that we can engage these multinationals on an equal basis unlike currently where it is felt that we have no clue as to how these financial statements are structured."
He insisted that the exercise was not a witch hunt, but just a measure to root out illicit financial flows to offshore havens for tax avoidance and underpayment.
"Whatever may have happened in the past I would not want any retrospective action in respect of any correction that we make, if we were sleeping and blind to those problems yesterday we would not want to go back that far to say pay us what we think you should have paid us."
Last year, Innscor Africa, was named in the leaked Panama Papers as having engaged a Panama law firm Mossack Fonseca to process payments of two directors via offshore companies in the British Virgin Islands.
Another high profile company, Zimplats, a unit of South Africa's Impala Platinum was also named in the documents for having paid executives' salaries using an offshore company, but Implats refuted this. Zimbabwe is currently battling cash shortages that Government has partly blamed on externalisation of the USD, the country's chief currency.
He said in some cases management fees (periodic payments of costs of having assets professionally managed) were as high as 10 percent. "We are training our Zimra staff to understand and analyse accounts and books of multinationals. We are trying to zero in on where there is capital outflow," he said.
"So far what in fact has come up from that training is that the area we need to look at in financial statements of multinationals are what they charge as management fees. Is the percentage they are charging African countries the same as what they charge everywhere else in the world?"
Minister Chinamasa added: "The other area is of course on royalties. Those are areas where I have encouraged Zimra to build capacity so that we can engage these multinationals on an equal basis unlike currently where it is felt that we have no clue as to how these financial statements are structured."
He insisted that the exercise was not a witch hunt, but just a measure to root out illicit financial flows to offshore havens for tax avoidance and underpayment.
"Whatever may have happened in the past I would not want any retrospective action in respect of any correction that we make, if we were sleeping and blind to those problems yesterday we would not want to go back that far to say pay us what we think you should have paid us."
Last year, Innscor Africa, was named in the leaked Panama Papers as having engaged a Panama law firm Mossack Fonseca to process payments of two directors via offshore companies in the British Virgin Islands.
Another high profile company, Zimplats, a unit of South Africa's Impala Platinum was also named in the documents for having paid executives' salaries using an offshore company, but Implats refuted this. Zimbabwe is currently battling cash shortages that Government has partly blamed on externalisation of the USD, the country's chief currency.
Source - New Ziana.
