Wadyajena's tax case deferred

HARARE - The Constitutional Court yesterday deferred hearing an urgent chamber application lodged by Gokwe-Nembudziya legislator Justice Wadyajena seeking to stop the taxman from bankrupting his business.

The matter was postponed to July 11.

Wadyajena’s Mayor Logistics (Pvt) Limited, a company in the business of fuel and transport operations in Zimbabwe, has been sequestrated over a $2,6 million VAT bill.

The State says it needs more time to go through Wadyajena’s application before filing its response.

Deputy Chief Justice Luke Malaba postponed the matter to July 11 for hearing.

“By consent the matter is postponed to 12pm on July 11, 2014,” Malaba said.

“The applicant should have filed the supplementary heads of argument by 4pm on July 4, 2014. The respondent should have filed the heads of argument by 4pm , July 9, 2014.”

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

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.

According to information at hand, Wadyajena has not only been ordered to pay the full and outstanding amounts immediately, but owed as much as $2,6 million — broken down as $900 600 in principal income tax debt, a similar amount in penalties and VAT arrears of $809 580. As such, the likes of Sakunda — 100 percent owned by Kuda Tagwirei and his wife — have been appointed “agent(s) for the debtor under the provisions of the Income Tax Act Chapter 23:06 and Value Added Tax Act Chapter 23:12, and are required to remit… the total amount due.”

Although the Zanu PF legislator argues that his tax bill had been overstated and his company could not be charged VAT for “services paid in kind”, the revenue authority says that taxes are due since the transactions have a monetary value or are dollar-based.

The parliamentary portfolio committee chairperson on Indigenisation has rushed to the Constitutional Court to bar Zimra from garnishing its accounts and disprove the 2011-2012 tax assessments.

In his Constitutional Court appeal, Wadyajena said the arbitrary powers that Zimra were 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.

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


Comments (1)

iwe pay your tax......are you not charging VAT on your invoices?....zibenzi

lolo - 4 July 2014

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