Zimra's move disastrous

HARARE - The move by the Zimbabwe Revenue Authority (Zimra) to impose stiff penalties and garnisheeing the accounts of defaulting corporates is not only disastrous for companies but for the whole economy.

For the past few months, the national tax collector has been instituting various ways of collecting taxes from individuals and corporates such as charging presumptive taxes during trading which is different from the current situation where they fall due on a quarterly basis as a way of boosting government’s dwindling coffers.

While we do not condone neglecting to pay taxes on time, we feel that Zimra is unnecessarily and unfairly punishing the few remaining companies by demanding tax obligations in advance and by garnishing their accounts.

For the past few weeks, companies such as Chicken Slice, Psmas, diamond firms and many State-owned enterprises have been at the receiving end of Zimra’s unmerciful garnisheeing axe.

If nothing is done to stop this behaviour by the national tax collector, chances are high that one day we will wake up and discover that most of the few remaining companies have closed shop and rendered thousands of workers jobless.

With Zimbabwe’s unemployment rate hovering over 80 percent, we suggest that it would be prudent for government to consider extending tax-breaks and incentives to existing companies to enable them to grow and create more employment.

What this country needs at the moment is the stimulation of consumer demand and not the stifling of producing companies.

It’s not a secret that across all sectors of the country’s tottering economy, the trading environment has further deteriorated, with nearly all companies struggling to stay afloat due to depressed demand and the inability by cash-strapped customers to pay for goods and services on time.

The result has been an unhealthy working capital situation that has seen most companies lagging behind with payments for their raw materials and other inputs, salaries, medical aid and pension contributions as well as statutory payments such as taxes.

Government should reduce its bloated workforce and devise other intelligent means of collecting and widening its revenue base instead of squeezing the few remaining companies. This is because in the end, corporates would be forced to come up with ways to evade taxes to ensure survival.

What is even more worrying is that government owes companies over $90 million for goods and services supplied, and yet it is  ordering the same companies that have not been paid their dues to pay taxes.

At this rate, it would be difficult, if not outright impossible, for government to formalise the informal sector. And who would blame the informal sector for evading taxes considering Zimra’s ruthlessness.

Comments (7)

Weldone ZIMRA keepup the good work. We as citizen we pay for high prices on goods and services in the name of VAT, yet the same goods and service providers are failing to give to cessar.....

kwaku - 13 June 2014

FOR HP TONER CARTRIDGES 05A, 10A, 11A, 12A, 13A, 15A, 24A, 35A, 36A, 42A, 49A, 51A, 53A, 55A, 61A, 64A, 70A, 78A, 80A, 85A, 90A, AND MANYMORE 0772 678 311

GALLERYCARTRIDGES - 14 June 2014

Charge them heavily especially on those benefit. Vasheta simba. They pay peanuts to workers. Cell phone allowance more than employee salary. Asi chii nhai?

bln - 17 June 2014

Zimra is doing a good job,but I for one really the service at zimra offices is so pathetic especially when you want to get a tax clearance like now they have introduced penalty on late submission of ITF 16"Payroll"as they call it,its truly rubbish yet someone will have paid paye in full and on time,zimra please stop this nonsense esp to ours few companies still operating and employing +/- 60 people.Gershem should investigate the tax clearance department asap for credibility.Ndatenda

Cde Chinotimba - 18 June 2014

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