Zimra lobbies for heavier penalties

The Zimbabwe Revenue Authority (Zimra) plans to increase fines on tax offences across the board as part of efforts to promote compliance, our Harare Bureau has learnt.

The revenue collector is currently lobbying for promulgation of more punitive fines on tax offences through Finance and Economic Development Minister Dr Ignatius Chombo's 2018 National Budget, Zimra chair Mrs Willia Bonyongwe said.

This comes amid concerns tax offenders do not find the current fines regime grave enough.

"I was saying to the board it is not fair for those who pay taxes when those who do not (comply), pay small penalties," Mrs Bonyongwe told a Zimra tax appreciation awards dinner on Monday, adding "this is budget time and we are lobbying."

Mrs Bonyongwe said the move was meant to punish tax offenders and deter new offences in line with global standards.

"The fines we have are not deterrent enough (and) we want to adopt international best practices," she later told our Harare Bureau although she could not be drawn to discuss the extent of reviews as the matter is under discussion.

The  Income Tax Act notes that in terms of general offences under subsection 81, offenders shall be guilty of an offence and liable to a fine not exceeding level seven or to imprisonment for a period not exceeding three months or to both such fine and such imprisonment.

"To this section (80), unless a payee furnishes the paying officer with a tax clearance certificate, the paying officer shall withhold 10 per centum of each amount payable to the payee under the contract concerned, and shall remit each amount so withheld to the Commissioner on or before the 10th day of the month following that in which the payment was made," reads the Act in part.

Under sub section 82 — covering wilful failure to comply with requirements of Commissioner or to keep proper accounts, and obstruction — the Act says offenders shall be guilty of an offence and liable to a fine not exceeding level seven or to imprisonment for a period not exceeding one year or to both such fine and such imprisonment.

If it is proved that that person has been previously convicted of a like failure, neglect or refusal in relation to the same return, document, information, reply, books or papers, then such person shall, in addition to any punishment inflicted under such section, be liable also to a fine not exceeding level one for each day that he is in default, or to imprisonment for a period not exceeding 12 months.

Finance and Economic Development Permanent secretary Mr Willard Manungo, told the event consultations were currently ongoing with the ministry taking input from various sectors of the economy, corporates and individuals ahead of the crucial National Budget. Mr Manungo commended Zimra's efforts to collect taxes, saying the results were encouraging after beating last year's January to September  figures.

According to Zimra's 2017 3rd quarter report, gross collections for the quarter were $1,03 billion translating to 19,25 percent above the target of US$863,56 million. Net collections, after deducting US$62,05 million in refunds amounted US$967,76 million was still 12,07 percent above target.

The gross collections were 13,30 percent above the same period in 2016. The positive performance is attributable to higher collections in Value Added Tax (VAT) on local sales and imports, Individual Tax, Excise Duty and Company Tax.

Cognisant of the volatility in the operating environment and the challenges to effective revenue mobilisation, the Zimbabwe Revenue Authority continues to explore and implement various revenue enhancement measures and other administrative efforts to ensure constant revenue streams to the fiscus.

Zimra acting Commisioner general Mr Happias Kuzvinzwa urged tax payers to desist from bribing the revenue collector's officials.

"Do not pay them anything when they do their jobs because they are paid enough already for what they are supposed to do," Mr Kuzvinzwa said, adding corruption remained a challenge in tax collection.