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Zimra gridlocks ground companies

by Staff reporter
20 Feb 2022 at 08:55hrs | Views
THE Zimbabwe Revenue Authority (Zimra)'s e-filing system has been overwhelmed since December last year, triggering serious gridlocks for thousands of companies attempting to file their tax returns.

Standardbusiness was told on Friday that so dire was the situation that some company executives have had to wake up at midnight to submit their returns.

The companies' predicament has been compounded by the fact that Zimra has been hitting them with heavy penalties for delaying to submit their tax returns, according to sources whose firms have been thrown into disarray.

Companies that fail to file tax returns are blocked from accessing tax clearance forms, one of the most important documents required in business.

Francis Chimanda, head of corporate communications at Zimra confirmed on Friday that the system has been malfunctioning.

Chimhanda told Standardbusiness that plans were underway to revamp the system in line with industry demands.

"It is true that the e-services system has been experiencing challenges," he said.

"The system is being replaced as part of broad based measures to address the challenges.

"An end to end solution assessment conducted as part of the digitalisation strategy concluded that the system needed to be replaced with a more modern solution that is responsive and more adaptable to the rapidly changing environment and this process is at an advanced stage.

"The e-services system has not been down except for planned maintenance activities.

"The main challenges experienced have been due to congestion on the system causing some users to fail to login.

"Currently some submissions are coming through the platform.

"During the first three months of the year there is a huge increase in traffic volumes due to the demand for tax clearance certificates."

But executives who spoke to Standardbusiness said the system has been collapsing since December, before the situation worsened last month.

"The system has been working intermittently since December last year," one executive said.

"But at the beginning of January, it was not working.

"If you try to log in it says ‘run time error' or ‘technical issues'," the source told this publication.

Another source added: "It is only at midnight that if you are fortunate enough it can allow one to submit returns and during the day it does not work at all.

"If returns are not filed you can't get your tax clearance.

"The option would be manual submission, but this will overwhelm Zimra.

"Companies are losing business because they don't have tax clearances.

"They lose 30% in the form of withholding tax.

"If you don't have a tax clearance companies that you sell products and services to will deduct 30% from their payments."

There are deep concerns that the system lapse has opened floodgates for rent seeking behaviour and collusion as companies are now forced to engage Zimra officials to manually submit returns.

Experts said with many companies pressing hard to file tax returns and process tax clearances human interface raises fears of under hand dealings and corruption.

Tax heads that require filing of returns are Income Tax, Pay and You Earn and Value Added Tax.

A tax expert, who spoke to this publication, said the delay to access tax clearance forms had forced companies to lose through the 30% withholding tax.

While the 30% may be reclaimed after a company has been given a tax clearance, some businesses say with inflation rising, the domestic currency has been losing value.

"The business cycles will be disrupted so much that one may fail to continue, unless they were already putting in ridiculous mark ups. Zimra is not losing," the expert said.

"It is the market that is suffering.

"It is also possible that not everyone will claim that 30% back so Zimra will benefit.

"In terms of restocking, companies cannot restock as well because that 30% may have been the mark up."

Zimbabwe Information and Communication Technology Division chairperson Jacob Mutisi said a country cannot operate with revenue tax collection system that are down for several months.

He said it was high time the taxman dealt with the issue.

"They should engage ICT specialist to analyse and improve operations at Zimra," Mutisi said.

"There is now a need to look for ways to return employees who have an ICT background.

"This has been on-going for close to seven years."

Source - The Standard