CZI calls for Zimra reform

HARARE - Confederation of Zimbabwe Industries (CZI) has called for the restructuring of the Zimbabwe Revenue Authority (Zimra) and its operations, to eliminate corruption and help improve revenue collection.

Over the years, industrialist and market experts have blamed Zimra, which is mandated to collect revenue from all sectors of the economy, for failing to recoup enough money into the fiscus due to rampant corruption.

In its 2013 budget input to Treasury, CZI said operational inefficiencies by the revenue collector were costly to business.

“The current protection system is not working. Companies cannot afford the time and human resources needed to go through the whole process. As such the paradigm of the post audit division of Zimra should be re-oriented to ensure that their major clients, that is, industry, are protected,” said CZI.

Last year Finance minister Tendai Biti sanctioned Zimra’s restructuring after advice from the International Monetary Fund (IMF) which had criticised the old structure for straining Zimbabwe’s perennially-constrained fiscus.

However, the industrial mother body feels more should be done to bring transparency at border posts to reduce the illegal influx of cheap foreign goods into the local market.

“Whistle-blowing on smuggled goods is not yielding any results and can only assume that Zimra officials are being bribed. A case in point is the issue of batteries which seems to be imported using wrong tariff headings,” said CZI.

“There is need to prioritise Beitbridge becoming a one-stop boarder post. Government must also engage suitable experts to analyse boarder post bottlenecks at Beitbridge to come up with solutions to reduce transit time.”

CZI also urged the Finance minister to establishment an alternative tax dispute-resolution mechanism as opposed to the current one where Zimra is both the jury and the judge.

“This will take the form of a panel of tax experts that conciliate between Zimra and the client in a non-binding fashion. If Zimra or the client is still unhappy then recourse to the courts should apply,” said the industry body.

The current levels of penalties, noted CZI, and the lack of transparency in the process being instituted by Zimra are detrimental to business viability.

“There is need to ensure that Zimra publicises the penalty loading models for late payments as previously announced,” said CZI.

“In the case of self-reported errors in tax submissions, Zimra should not charge a penalty, but should levy interest to the amount — provided the self-report is done before an audit by Zimra. In the event a self-report is done after notification on an audit then a 10 percent penalty should apply.”

CZI feels the revenue authority needs to build working relations with the tax payer and understand that facilitation of payments is a two-way process.

“Zimra should embark on an outreach programme to endear to the taxpayer. Zimra should issue practise notes for all circumstances.”

In his pre-budget strategy paper last month, Biti said the promulgation of a new tax law will help in improving revenue collection.

“In 2013 and beyond, it is imperative that we take steps to improve revenue collections, benefiting from improved transparency, accountability, and good governance in the production, valuation and marketing of mineral resources.

“Improved revenue collection should also benefit from the achievement of full fiscalisation, as well as promulgation of the new Income Tax Act,” he said.

Biti hinted that he is working on a cocktail of measures to help reduce corruption at Zimra by rolling out the fiscalisation programme to the remaining sectors during the course of next year.

“On the other hand, customs duty will equally be boosted by completion of the automation programme at the Revenue Authority,” he said.

“This should minimise interface between customs officials and the public, going a long way in curbing corrupt tendencies.

“Contribution from customs duty and the mineral sector will also be enhanced through intensified efforts in plugging leakages at ports of entry and at the mines, respectively.”

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