MP faces bankruptcy

HARARE - Flamboyant Gokwe Nembudziya Zanu PF MP Justice Mayor Wadyajena is being haunted by the taxman, and could be thrown out  of his transport business by the Zimbabwe Revenue Authority (Zimra) which has had him sequestrated over a $1,6 million VAT bill.

Wadyajena, who chairs Parliament’s influential portfolio committee on Youth, Indigenisation and Economic Empowerment, faces charges of tax evasion, the latest in a series of blows to hit the young turk, linked to Emmerson Mnangagwa’s faction.

Zimra has filed a tax evasion complaint against Wadyajena’s Mayor Logistics (Pvt) Limited, a company in the business of fuel and transport operations in Zimbabwe.

The charges come after Wadyajena clashed with Mt Darwin South legislator and former Indigenisation minister Savior Kasukuwere over claims that mining firms extracting diamonds in Manicaland flatly deny that they had an agreement obligating them to stump $50 million for the communities in the Marange-Zimunya areas.

Wadyajena’s committee  is also probing allegations that Kasukuwere abused the Youth Fund amid reports that it benefitted those close to himself, including his brother, and cronies of his Zanu PF faction.

Kasukuwere has been mired in a nasty altercation with the Gokwe-Nembudziya MP over the latter’s parliamentary work, which has exposed the boisterous minister’s controversial tenure at the Indigenisation department.

The youthful MP has also said in a letter addressed to parliamentary speaker Jacob Mudenda in early April, that he was threatened by Kasukuwere in front of Assembly colleagues for merely seeking to understand Zimbabwe’s economic empowerment programme, in line with his oversight role.

Now Zimra has accused the fresh-faced MP of failing to declare his income and pay the proper amount of taxes from 2011 and 2012.

“The non declaration of income from fuel transportation led to understatement of taxable income resulting in an additional tax liability of $1 033 326.42,” say Zimra’s April 26 letter to Mayor Logistics’s public officer.

“Please note that a 100 percent penalty has been levied.”

Zimra is now requiring Wadyajena, one of the rising Zanu PF young turks, to pay $2 066 652.84 in aggregate tax liabilities for 2011 to 2012.

Officials say the move to bankrupt Wadyajena was part of a ploy to scuttle his bid for the deputy secretary for youth post at the December Zanu PF congress. The deputy secretary for youth sits in the powerful Politburo.

Wadyajena operates a fuel service station in Kwekwe that purchases fuel from Sakunda Energy (Sakunda) and pays for the fuel in kind through the provision of fuel transportation services, and at times, in cash.

Mayor Logistics also provides fuel transportation services to Sakunda for a fee.

Sakunda is a fuel import and distribution company solely owned by Kuda Tagwirei.

It is totally independent from Mayor Logistics.

Zimra’s letter to Wadyajena’s firm said revenue from his fuel transportation business was not subjected to VAT, and was also not included as income to the business.

Official sources said the growing popularity of the young lawmaker made tax officials “curious” about his financial state and whether he was paying taxes, according to Zimra officials who spoke on condition of anonymity.

After only a “cursory check,” Zimra officials said they discovered that Wadyajena was delinquent in paying taxes and thereafter sent him an official notice.

“If you earn an income in the country, you have to pay taxes,”  said the Zimra official.

But the MP denies that he is evading his duties to pay taxes as a corporate citizen deriving his income in Zimbabwe, specifically through Mayor Logistics.

Besides approaching the Fiscal Appeals Court, Wadyajena has also approached the Constitutional Court, protesting why he is being charged with tax evasion.

This was after Zimra had advised Wadyajena that the VAT and income tax was “overdue and should be remitted forthwith” in a stunning move that immediately bankrupts him. 

Zimra was moving in to take measures to clean Wadyajena’s bank accounts.

In his Constitutional Court appeal, Wadyajena said the arbitrary powers that Zimra was using were “invasive, harmful and destructive”.

“The ‘pay now argue later’ approach to the collection of taxes will be very harmful to applicant’s business as the amounts involved are colossal in nature and not remotely related to the minuscule profit margins that applicant makes in any given trading year,” Wadyajena’s Con-Court appeal says.

“Applicant will not make that sort of money in 10 years.”

Wadyajena insists he has been paying his taxes religiously and was up to date.

He said Zimra was keen to take “summary action without paying any apparent regard to appellant’s compliance history as a taxpayer, the amount of tax involved, the risk of dissipation of assets by the taxpayer during any payment suspension period, whether the taxpayer is able to provide adequate security and whether payment of the amount would result in irreparable financial hardship to the taxpayer.”

He said he risked losing his fuel transportation business because Zimra was acting with reckless disregard and that he was the victim of a very serious and prolonged injustice.

Government says tax-dodging is a serious problem in Zimbabwe, where, along with corruption, poor tax collections leave the State unable to pay for basic services and improve facilities like roads and airports.

Since President Mugabe was elected under an anti-corruption platform in 2013, the justice department and the taxman have been aggressively filing tax-evasion charges against wealthy businesspeople, as well as celebrities.

Comments (2)

This is what Kasukuwere meant when he said he would destroy you. but as it now stands, zvatofumuka. With all due regard, prove to them that you have been paying your taxes religiously. Ngwena is behind you and will not let you fall. After all, is he not the Justice Minister?

Hwezhahwezha - 12 June 2014

the MP has a very sound Con-Court appeal. ZIMRA can not unilaterally take action without recourse from a competent court. the same reasoning used against Harare City Council can be applied in this case. i.e dont act whereas there is a dispute

Letsatsi - 12 June 2014

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