News / National
Zimra battles to recover $240m
08 Jan 2015 at 08:55hrs | Views
THE Zimbabwe Revenue Authority may fail to recover about $240 million in unpaid taxes as it emerged that some of the companies owing the authority have closed.
According to a report by the Auditor-General for the financial year to December 31 2013, the $240 million represented amounts outstanding from as far back as 2009.
The report, however, stated that $508 million was outstanding as of December 2012 with the bulk of the funds owed by ZIMRA clients that failed to fulfil their obligations.
"There is risk that debts to the tune of $240 million may not be recovered due to the lapse of time," the report noted, while urging the Government to take steps to recover outstanding revenues so that there is no financial prejudice to Treasury.
The audit said Treasury should work together with the revenue authority to address the issue of companies that have ceased operations, but still owe the Government.
The report also noted that there were discrepancies between balances on the Treasury schedule and the audited returns in respect of the Ministry of Public Service, Judicial Service Commission and Zimra.
It said the Ministry of Finance did not incorporate all the returns, as it only received 68 percent of returns from the ministries.
"The return from Treasury may be misstated because 32 percent of receivers of revenue failed to submit their returns for outstanding revenue for consolidation," the audit report said, recommending that the Ministry of Finance should insist that all receivers of revenue submit all returns to enhance disclosure and accountability.
For instance, Zimra had not included outstanding revenue of $508 million. The Ministry of Transport, Communication and Infrastructure Development public financial assets return showed outstanding loans to the Civil Aviation Authority and National Railways of Zimbabwe amounting to $2,5 million at the end of financial year 2013.
The outstanding revenue in the form of interest on loans could not be established due to unavailability of loan agreements, which signifies poor revenue monitoring, weak internal controls and lack of accountability in Government institutions.
The report noted serious governance issues and debt recovery weaknesses which have resulted in Government failing to properly account for its revenue. It said governance weaknesses were observed in internal controls, record keeping and diversion of resources from fund accounts to ministries, reconciliations of the sub paymaster general account with the Public Finance Management Systems records, submission of returns and accounts and management of State property and resources.
As a result, the audit also revealed significant variances totalling $409 million between the Exchequer bank account and Public Finance Management Systems records in 2013.
Weaknesses in debt recovery systems in some ministries also resulted in Government being owed more that $50 million in respect of various debtors such as outstanding travel and subsistence advances and outstanding revenues in form of rentals.
According to a report by the Auditor-General for the financial year to December 31 2013, the $240 million represented amounts outstanding from as far back as 2009.
The report, however, stated that $508 million was outstanding as of December 2012 with the bulk of the funds owed by ZIMRA clients that failed to fulfil their obligations.
"There is risk that debts to the tune of $240 million may not be recovered due to the lapse of time," the report noted, while urging the Government to take steps to recover outstanding revenues so that there is no financial prejudice to Treasury.
The audit said Treasury should work together with the revenue authority to address the issue of companies that have ceased operations, but still owe the Government.
The report also noted that there were discrepancies between balances on the Treasury schedule and the audited returns in respect of the Ministry of Public Service, Judicial Service Commission and Zimra.
It said the Ministry of Finance did not incorporate all the returns, as it only received 68 percent of returns from the ministries.
"The return from Treasury may be misstated because 32 percent of receivers of revenue failed to submit their returns for outstanding revenue for consolidation," the audit report said, recommending that the Ministry of Finance should insist that all receivers of revenue submit all returns to enhance disclosure and accountability.
For instance, Zimra had not included outstanding revenue of $508 million. The Ministry of Transport, Communication and Infrastructure Development public financial assets return showed outstanding loans to the Civil Aviation Authority and National Railways of Zimbabwe amounting to $2,5 million at the end of financial year 2013.
The outstanding revenue in the form of interest on loans could not be established due to unavailability of loan agreements, which signifies poor revenue monitoring, weak internal controls and lack of accountability in Government institutions.
The report noted serious governance issues and debt recovery weaknesses which have resulted in Government failing to properly account for its revenue. It said governance weaknesses were observed in internal controls, record keeping and diversion of resources from fund accounts to ministries, reconciliations of the sub paymaster general account with the Public Finance Management Systems records, submission of returns and accounts and management of State property and resources.
As a result, the audit also revealed significant variances totalling $409 million between the Exchequer bank account and Public Finance Management Systems records in 2013.
Weaknesses in debt recovery systems in some ministries also resulted in Government being owed more that $50 million in respect of various debtors such as outstanding travel and subsistence advances and outstanding revenues in form of rentals.
Source - The Herald
