Latest News Editor's Choice


News / National

Zimra collects US$18,5 million forex from retailers

by Staff reporter
10 Mar 2019 at 08:46hrs | Views
THE Zimbabwe Revenue Authority (Zimra) has so far collected almost US$18,5 million in value added tax (VAT) from retailers selling goods and services in foreign currency, it has been learnt.

Government directed the taxman to begin collecting VAT in forex, particularly from companies that were charging their goods and services in hard currency, in November last year after some service providers stopped accepting electronic payments and insisted on hard currencies.

There were also fears that the practice was fuelling arbitrage as most businesses were paying their tax obligations using electronic payments, which were heavily discounted on the parallel market.

Zimra acting head of corporate communications Mrs Inzwirashe Muwonwa told The Sunday Mail Business last week that they had "collected a total of US$18 481 400 to date".

"Indeed, the traders are required to pay VAT in forex. We have held several meetings or seminars with the traders to remind them of the tax obligation.

"After the announcement of the Monetary Policy Statement and the promulgation of the Finance Act Number 1 of 2019, we are preparing the guidelines and public notices for our taxpayers.

"In addition, we carry out on a regular basis tax compliance enforcement measures, including tax audits."

In October last year, the Reserve Bank of Zimbabwe (RBZ) allowed banks to separate Nostro Foreign Currency Accounts (FCAs) from RTGS accounts as it deliberately tried to coax the US dollar in the mainstream banking system.

However, the decision — which was interpreted as a devaluation of electronic money and bond notes and coins — fuelled activity on the parallel market.

In order to preserve value, most companies began demanding payments in foreign currency.

Government reacted by ordering Zimra to collected VAT from such traders in "their currency of trade".

But small retailers, most of which trade in cash and foreign currency, still remain outside Zimra's dragnet.

It is also increasingly difficult for authorities to account for the businesses as they are not fiscalised.

Further, some market watchers believe there could be collusion between Zimra staffers and traders in order to cheat the system.

However, Mrs Muwonwa said Zimra had sufficient systems to ensure the integrity of their staff.

"Failure to abide by the requirements of this policy is a dismissable offence. As a measure to enforce this policy, Zimra conducts periodic lifestyle audits on all its employees.

"The lifestyle audits also cover tax issues on these employees and their businesses, if any.

"Zimra will not tolerate employees who breach the income tax provisions and will take appropriate disciplinary action," she said.

Source - sundaymail

Subscribe

Email: