News / National
Delta takes Zimra to court
18 May 2024 at 07:17hrs | Views
Zimbabwe's largest beverages producer recently announced its opposition to a US$54.8 million tax claim, labeling it as unjust enrichment for the Zimbabwe Revenue Authority (Zimra). Delta Corporation, listed on the Zimbabwe Stock Exchange, disclosed this amid the complex tax landscape caused by currency fluctuations.
Delta's concern stems from additional income tax and value-added tax assessments totaling US$54.8 million for the periods 2019 to 2021. These assessments were imposed on settlements made in Zimbabwe dollars, which Zimra insists should have been in foreign currency. Delta's chairperson, Sternford Moyo, highlighted that the group is challenging these assessments through the courts, as no credit was given for payments made in Zimbabwe dollars.
The principal amount settled in Zimbabwe dollars equates to US$9.8 million for income tax and US$25.2 million for value-added tax. However, if Delta's appeal fails, the refund could be equivalent to just US$115,000 due to inflation, resulting in potential unjust enrichment for Zimra. This discrepancy could cost Delta US$54.6 million.
Furthermore, uncertainties arise from legislation regarding the currency of tax settlement, leading to differing interpretations between businesses and tax authorities. Delta continues to engage with relevant authorities while challenging these assessments.
The recent currency transition to ZiG in April further complicates matters, potentially exacerbating policy-induced uncertainties. Edwin Manikai, chairperson of National Foods Limited, highlighted the challenges stemming from currency shifts, compounded by the lack of clear guidance from tax authorities.
Businesses, including members of the Employers Confederation of Zimbabwe (Emcoz), have expressed frustration over tax issues, including a sugar levy dispute. Zimra's attempt to collect the levy, initially set at US$0.002 per gram of sugar, even after revision to US$0.001, has sparked controversy among companies engaged in ongoing consultations over its implications.
Delta's concern stems from additional income tax and value-added tax assessments totaling US$54.8 million for the periods 2019 to 2021. These assessments were imposed on settlements made in Zimbabwe dollars, which Zimra insists should have been in foreign currency. Delta's chairperson, Sternford Moyo, highlighted that the group is challenging these assessments through the courts, as no credit was given for payments made in Zimbabwe dollars.
The principal amount settled in Zimbabwe dollars equates to US$9.8 million for income tax and US$25.2 million for value-added tax. However, if Delta's appeal fails, the refund could be equivalent to just US$115,000 due to inflation, resulting in potential unjust enrichment for Zimra. This discrepancy could cost Delta US$54.6 million.
Furthermore, uncertainties arise from legislation regarding the currency of tax settlement, leading to differing interpretations between businesses and tax authorities. Delta continues to engage with relevant authorities while challenging these assessments.
The recent currency transition to ZiG in April further complicates matters, potentially exacerbating policy-induced uncertainties. Edwin Manikai, chairperson of National Foods Limited, highlighted the challenges stemming from currency shifts, compounded by the lack of clear guidance from tax authorities.
Businesses, including members of the Employers Confederation of Zimbabwe (Emcoz), have expressed frustration over tax issues, including a sugar levy dispute. Zimra's attempt to collect the levy, initially set at US$0.002 per gram of sugar, even after revision to US$0.001, has sparked controversy among companies engaged in ongoing consultations over its implications.
Source - zimbabwe independence
