Zimra launches a blitz on tax evading companies

THE Zimbabwe Revenue Authority (Zimra) has launched a blitz on tax evading companies, imposing stiff penalties on registered business operators not remitting taxes to the authority.

Zimra officials last week visited most companies in Bulawayo to investigate and audit their books, checking if their tax payment records were up to date.

The authority recently announced that it had missed its target for the third quarter of the year, citing poor economic performance.

Zimra is also reportedly moving towards garnishing bank accounts of corporates who have not been remitting taxes.

Some of the affected companies told Sunday News that the heavy fines being imposed by the authority were not realistic and could force most companies to close.

One company operator said he had missed Value Added Tax (VAT) payments by a few months, owing Zimra about $600 but was slapped with fines as much as $10 000.

"I don't make much money through my business and when I'm imposed with such a heavy fine, it points to me shutting down my business. I have been making VAT payments regularly but missed payments by just a few months. I have tried explaining that to the Zimra officers but they do not understand.

"I've since been slapped with a heavy fine of $10 000, which I also feel is unrealistic," said a company operator who chose not to be named.

Most of the companies that have been affected by the blitz are small to medium enterprises that operate on shoe string budgets and small capital.

The companies also said they were not at fault for delaying in remitting VAT as they too receive their payments late from their clients.

They cited Government departments as one of their clients that delay in making payments for services rendered, urging Zimra to consider the harsh operating environment, before swooping in on them with heavy fines.

"Sometimes your invoices will be showing that you would have done business for so much, but no payment would have been made. There is no way one can be able to pay taxes when they have not received cash payment from their clients, but Zimra is not considering all that.

"They (Zimra) need to be practical and not behave as if we are operating in a normal economic environment," said another business operator in the city who again declined to be named.

Zimra director legal and corporate services Ms Florence Jambwa confirmed the blitz but said the exercise was within the normal operations of the authority.

"The Zimbabwe Revenue Authority employs a number of strategies to enforce compliance in line with the fiscal legislation which it administers.

"These compliance projects are on-going and have the overall objective of collecting revenue due to the State in accordance with Zimra's mandate as stipulated in the Revenue Authority Act [Chapter 23:11]," she said.

Ms Jambwa could, however, not give the number of companies that are not remitting tax and have been fined so far during the blitz.

She also could not reveal how much Zimra was owed in unpaid taxes by companies, saying the figures will be published in the Zimra Board Chairman's revenue performance report after 31 December.

Zimra has previously come under fire from industries, who accuse the authority of being insensitive to their plight in a harsh economic environment.

According to the performance report Zimra collected $878,22 million against a target of $964 million in the third quarter of the year - a seven percent drop from $884 million collected during the same period last year.