Zimra, Nampak clash over ZW$27bn penalty

Nampak Zimbabwe, a major industrial packaging manufacturer, is contesting hefty penalties imposed by the Zimbabwe Revenue Authority (Zimra), amounting to ZW$26.7 billion. The company attributes this dispute to complications arising from Zimbabwe's volatile currency situation since 2018, which has led to uncertainties in tax treatments and transactions. John Van Gend, Nampak's group managing director, stated that these assessments and penalties are being legally contested, with the board confident that Zimra will reverse them once ongoing clarifications are resolved.

The situation reflects broader grievances among Zimbabwean corporations regarding Zimra's tax policies, with CEOs from companies like National Foods Limited, Innscor Africa Limited, and Delta Corporation expressing concerns over inconsistent currency policies. Nampak, which operates well-known brands like Hunyani Paper and Packaging, reported an adjusted turnover of ZW$976.2 billion for the half-year ended March 31, 2024, marking an 8% decline year-on-year.

Meanwhile, other firms, including Delta Corporation, are also challenging substantial tax assessments from Zimra. Delta has contested a US$54.8 million charge, arguing that the assessments, penalties, and interest imposed for periods between 2019 and 2021 unfairly require payments in foreign currency rather than the Zimbabwe dollar equivalents already settled. Delta's chairperson, Sternford Moyo, highlighted that these disputes are being taken to court, with the company seeking to have the assessments overturned or adjusted based on prevailing exchange rates and previous payments made in local currency.

Zimra, however, claims an 80% success rate in court cases related to tax disputes, indicating a challenging legal landscape for companies contesting tax assessments. This environment underscores the ongoing financial strain and regulatory challenges faced by Zimbabwean businesses amid currency fluctuations and stringent tax enforcement measures by the revenue authority.