News / National
Zimra recovers 87% debt from taxpayers in 2020
29 Dec 2020 at 07:22hrs | Views
The Zimbabwe Revenue Authority (ZIMRA) recovered ZWL$4 billion in unpaid taxes the Authority was owed by taxpayers who were in default, translating to an 87% recovery rate this year as the country went through a high inflation episode.
ZIMRA was owed ZWL$4.6 billion in February 2019 – a 15% increase from the ZWL$4 billion in May 2018 before recording a recovery in nominal terms this year.
The Authority indicated that its closing balance for December 2020 stood at ZWL$613.4 million.
"The debt decrease is mainly due to the implementation of a Debt Management Strategies…," said ZIMRA without mentioning the inflation effect.
The authority implemented several strategies that range from follow-up on all owing clients, negotiation of payment plans and set-off of tax debt owed to the taxpayers by the government and state-owned enterprises.
ZIMRA also, as a last resort, appointment of agents to collect debt – an exercise commonly known as garnish orders.
"Close follow up of taxpayers and the implementation of the ‘Know Your Client' (KYC) principle to prevent default in remittances and ultimately, the accumulation of debt. Implementation and monitoring of flexible payment plans proposed by the taxpayers and accepted by us.
"Collaboration with the Ministry of Finance and Economic Development to set-off tax debt with amounts owed taxpayers by the government and state owned enterprises. As a last resort, more drastic measures such as garnish orders. Institute attachment of property for recovery of debt and assumption of debt by government, where the government has a stake in the organisation," stated the Authority.
ZIMRA further clarified that the debt is now in Real Time Gross Settlement (RTGS) in line with the changes that were brought about by the government after the 1:1 rate was removed by Statutory Instrument 33 of 2019.
Independent analysis revealed that most defaulting taxpayers found it less cumbersome to offset the debt in RTGS as opposed to USD.
ZIMRA was upbeat that the raft of measures that they are implementing will yield positive results and will result in full recovery of the debt.
About 320 000 taxpayers are registered with ZIMRA.
ZIMRA was owed ZWL$4.6 billion in February 2019 – a 15% increase from the ZWL$4 billion in May 2018 before recording a recovery in nominal terms this year.
The Authority indicated that its closing balance for December 2020 stood at ZWL$613.4 million.
"The debt decrease is mainly due to the implementation of a Debt Management Strategies…," said ZIMRA without mentioning the inflation effect.
The authority implemented several strategies that range from follow-up on all owing clients, negotiation of payment plans and set-off of tax debt owed to the taxpayers by the government and state-owned enterprises.
ZIMRA also, as a last resort, appointment of agents to collect debt – an exercise commonly known as garnish orders.
"Close follow up of taxpayers and the implementation of the ‘Know Your Client' (KYC) principle to prevent default in remittances and ultimately, the accumulation of debt. Implementation and monitoring of flexible payment plans proposed by the taxpayers and accepted by us.
"Collaboration with the Ministry of Finance and Economic Development to set-off tax debt with amounts owed taxpayers by the government and state owned enterprises. As a last resort, more drastic measures such as garnish orders. Institute attachment of property for recovery of debt and assumption of debt by government, where the government has a stake in the organisation," stated the Authority.
ZIMRA further clarified that the debt is now in Real Time Gross Settlement (RTGS) in line with the changes that were brought about by the government after the 1:1 rate was removed by Statutory Instrument 33 of 2019.
Independent analysis revealed that most defaulting taxpayers found it less cumbersome to offset the debt in RTGS as opposed to USD.
ZIMRA was upbeat that the raft of measures that they are implementing will yield positive results and will result in full recovery of the debt.
About 320 000 taxpayers are registered with ZIMRA.
Source - finx
