News / Local
Zimra to intensify revenue collection
17 Oct 2022 at 01:05hrs | Views
THE Zimbabwe Revenue Authority (Zimra) is intensifying domestic resource mobilisation to guarantee the availability of adequate financial resources required to fund critical Government programmes.
Zimra Commissioner General Ms Regina Chinamasa said this in Bulawayo on Friday in her address to tourism players during a breakfast meeting at the 15th edition of the Sanganai/Hlanganani World Tourism Expo, which ended on Saturday.
With recourse to external lines of credit, the Government has over the past four years largely relied on internal resources to fund national projects, particularly infrastructural development initiatives like dam and road construction.
The tourism sector is one of the major economic centerpieces contributing 7 percent towards the Gross Domestic Product and the Government in line with the aspirations of the National Development Strategy 1, targeting a US$5 billion tourism industry by 2025.
She said voluntary tax compliance required the promulgation of the "right" policies.
"There is great potential in this (tourism) sector if we put the right policies in place which promote voluntary tax compliance.
"It is therefore imperative that we always gather to have honest discussions to find solutions to the challenges that the tourism sector faces as it seeks to comply with the country's tax and customs laws, and this platform is the perfect one which sets the tone for other future engagements."
Ms Chinamasa said domestic resource mobilisation had gained greater importance following the launch of the Addis Tax Initiative (ATI) in July 2015 and the adoption of the Sustainable Development Goals (SDG's).
As the country's revenue administrator, she said enhancing domestic resource mobilisation by Zimra was not just necessary, but a vital to guarantee resources for the Government's social and economic programmes.
"It is the only long-term panacea for the economy that is currently saddled with an international debt amounting to US$7,4 billion and a domestic debt of US$9,5 billion," she said.
The Zimra boss noted that the critical question was how the tourism sector could assist in creating adequate fiscal legroom for the Government to move away from dependency on foreign debt or aid.
On sustainable tax policy, Ms Chinamasa noted that it was common knowledge that complex tax legislation, tax codes, high tax rates, and high compliance burdens were powerful incentives for informalisation in any economy.
"Our considered view and appeal to the Government is to envisage a low tax-rate regime, especially in direct taxes like personal income tax paid by those in formal employment."
This, she said, removes the incentive to evade tax while increasing disposable incomes and thus stimulating aggregate demand in the economy.
"We see this aggregate demand not only spurring economic activity but also enhancing our Value Added Tax collections through increased consumption of goods and services.
"We believe that leveling the playing field encourages competitiveness in the economy and this includes doing away with Omnibus Tax Incentives which only serve to shift the profits to foreign jurisdictions which erode the tax base locally, and promotes rent-seeking behaviors from different industry players," said Ms Chinamasa.
Presently, Zimra is working on a number of initiatives to encourage voluntary compliance, one of which is the setting up of information kiosks where clients can go and get assistance on how they can comply using the authority's e-services platforms.
A pilot project was recently launched at Kurima House in Harare and Zimra is in the process of setting up such information kiosks across all the major inland stations.
"One of the major concepts we are working on adopting is the Cooperative Compliance programme concept popularised by OECD (Organisation for Economic Cooperation and Development) and is being piloted in some African countries like Ghana.
"The emphasis is on creating and nurturing a relationship based on trust and cooperation between the revenue authority and our clients," she said.
It is hoped that the Cooperative Compliance model will minimise conflict between tax authorities and businesses by establishing a relationship-based on transparency, justified trust and behavioural change in terms of the nature of tax avoidance or planning undertaken.
Ms Chinamasa added that cooperative compliance ensures a better understanding of the business through increased commercial awareness of tax officials, and regular updates on existing significant events affecting the taxpayer among other issues.
‘We will collectively endeavour to build and sustain linkages and collaborations with the tourism sector, to enhance synergies among players in revenue generation and trade facilitation," she said.
Zimra Commissioner General Ms Regina Chinamasa said this in Bulawayo on Friday in her address to tourism players during a breakfast meeting at the 15th edition of the Sanganai/Hlanganani World Tourism Expo, which ended on Saturday.
With recourse to external lines of credit, the Government has over the past four years largely relied on internal resources to fund national projects, particularly infrastructural development initiatives like dam and road construction.
The tourism sector is one of the major economic centerpieces contributing 7 percent towards the Gross Domestic Product and the Government in line with the aspirations of the National Development Strategy 1, targeting a US$5 billion tourism industry by 2025.
She said voluntary tax compliance required the promulgation of the "right" policies.
"There is great potential in this (tourism) sector if we put the right policies in place which promote voluntary tax compliance.
"It is therefore imperative that we always gather to have honest discussions to find solutions to the challenges that the tourism sector faces as it seeks to comply with the country's tax and customs laws, and this platform is the perfect one which sets the tone for other future engagements."
Ms Chinamasa said domestic resource mobilisation had gained greater importance following the launch of the Addis Tax Initiative (ATI) in July 2015 and the adoption of the Sustainable Development Goals (SDG's).
As the country's revenue administrator, she said enhancing domestic resource mobilisation by Zimra was not just necessary, but a vital to guarantee resources for the Government's social and economic programmes.
"It is the only long-term panacea for the economy that is currently saddled with an international debt amounting to US$7,4 billion and a domestic debt of US$9,5 billion," she said.
The Zimra boss noted that the critical question was how the tourism sector could assist in creating adequate fiscal legroom for the Government to move away from dependency on foreign debt or aid.
"Our considered view and appeal to the Government is to envisage a low tax-rate regime, especially in direct taxes like personal income tax paid by those in formal employment."
This, she said, removes the incentive to evade tax while increasing disposable incomes and thus stimulating aggregate demand in the economy.
"We see this aggregate demand not only spurring economic activity but also enhancing our Value Added Tax collections through increased consumption of goods and services.
"We believe that leveling the playing field encourages competitiveness in the economy and this includes doing away with Omnibus Tax Incentives which only serve to shift the profits to foreign jurisdictions which erode the tax base locally, and promotes rent-seeking behaviors from different industry players," said Ms Chinamasa.
Presently, Zimra is working on a number of initiatives to encourage voluntary compliance, one of which is the setting up of information kiosks where clients can go and get assistance on how they can comply using the authority's e-services platforms.
A pilot project was recently launched at Kurima House in Harare and Zimra is in the process of setting up such information kiosks across all the major inland stations.
"One of the major concepts we are working on adopting is the Cooperative Compliance programme concept popularised by OECD (Organisation for Economic Cooperation and Development) and is being piloted in some African countries like Ghana.
"The emphasis is on creating and nurturing a relationship based on trust and cooperation between the revenue authority and our clients," she said.
It is hoped that the Cooperative Compliance model will minimise conflict between tax authorities and businesses by establishing a relationship-based on transparency, justified trust and behavioural change in terms of the nature of tax avoidance or planning undertaken.
Ms Chinamasa added that cooperative compliance ensures a better understanding of the business through increased commercial awareness of tax officials, and regular updates on existing significant events affecting the taxpayer among other issues.
‘We will collectively endeavour to build and sustain linkages and collaborations with the tourism sector, to enhance synergies among players in revenue generation and trade facilitation," she said.
Source - The Herald
