Kereke tax dues slashed to $1.7m from $4

The Zimbabwe Revenue Authority has slashed RMC Hospital's tax bill from the original $4 million to $1,7 million after the hospital owner and Bikita West legislator Dr Munyaradzi Kereke submitted information required for the assessment of taxes for the last three years.

The tax collector on Friday wrote to Dr Kereke advising him that the paper trail he submitted on February 17 necessitated the reduction, the Herald reported.

The new twist to the tax row comes after Dr Kereke appealed to the Supreme Court against the High Court decision that he should settle the tax arrears with the revenue authority.

He wants the apex court of appeal to quash the lower court's decision and lift garnishee orders imposed on RMC's major trade debtors - Cimas, Premier Service Medical Aid Society and Stanbic Bank - to collect tax liabilities amounting to $3 297 103, 62.

The balance was made up of penalties for late payment of taxes, which include Pay As You Earn, Income Tax and Withholding  Tax.

Zimra still insists that Dr Kereke's $422 878 additional investment in 2012 needs to be supported with more paper trail.

But Dr Kereke says in his papers that the money should not be taxed because it was part of his severance package from the Reserve Bank of Zimbabwe which Zimra had already taxed.

Areas where Zimra has made concessions include reversals of taxes that had been allegedly lumped on Dr Kereke's Mt Pleasant house that had been invested into the hospital project and income of doctors which had been wrongly taxed.

Zimra also reversed taxes on RMC Hospital's bank loans which it had taken as taxable revenue.

"This about-turn has left Justice (Joseph) Mafusire in a very awkward position as he had ruled that he had not seen anything outrageous and unreasonable about Zimra's original tax assessments, and Kereke was to pay the full bill," said RMC lawyers.

Zimra, however, said the action it took against RMC was in accordance with the law and not a vendetta on the person of Dr Kereke.

The tax collector added that it is allowed in terms of Section 44 of the Income Tax Act to request the necessary information which the Commissioner of Taxes may consider necessary for proper assessment of taxes.

Justice Mafusire last month dismissed Dr Kereke's application, saying Zimra's conduct was above board and that the legislator should not be treated differently from other taxpayers and must comply with the law.