Zimra goes after the rich

HARARE - Mansions owners will soon have to answer questions from the taxman after the Zimbabwe Revenue Authority (Zimra) commissioner general, Gershem Pasi, indicated that he would soon be launching an investigation into the sources of funding for the mega structures.  

Faced with a dwindling revenue base due to massive company closures and lack of activity in the economy, Zimra is coming up with a cocktail of measures to squeeze cash from both the rich and the poor.

The hard-pressed national tax collector has in recent months been forced to be creative and scratch everywhere to meet the Zimbabwe government’s huge wage bill and the ever-increasing capital expenditure.

Government mostly relies on Zimra collections, mainly value added tax (Vat), to pay its 240 000 workers.

Pasi told Parliament recently that his organisation was currently working flat out to ensure that everyone in the country — especially the rich, who are notorious for tax evasion — was up-to-date with their tax obligations.

“We actually have an exercise going on, where we are working with the Deeds Office to create a data base of the property sector to ensure that developers and home-owners were complying with taxation laws,” Pasi said. “This will also assist us in carrying out our audits on home-owners.”

This comes as huge mansions and villas are sprouting in Zimbabwe’s leafy suburbs at a time when the majority of the population are struggling to make ends meet, raising concerns of possible tax evasion by the affluent in society.

The Zimra boss indicated that he was consulting Finance minister Patrick Chinamasa to come up with a law that allows the tax collector to attach fixed properties of tax evaders.

“We want the law to be strengthened so that we can attach immovable properties so that when we see you have (unlawfully) taken money from the company to build mansions, we want to be able to take the property,” he said.

The latest statement by the national tax collector boss follows revelations that the country is believed to have lost nearly $85 million in unpaid taxes from State enterprises, parastatals and local authorities between 2009 and 2013.

Zimbabwe is ranked 13 on the list of African countries losing tax revenue and the Afrodad estimates that the country lost close to $12 billion over the past three decades in uncollected tax.

A recent study commissioned by Afrodad entitled: “What has tax got to do with development: A critical look at Zimbabwe, Mozambique and Lesotho’s Taxation Systems”, established that revenue collection in Zimbabwe is poor due to the weaknesses in policies that regulate tax compliance.

Poor revenue collection was attributed to failure by Zimra to effectively monitor business transactions. The study noted that Zimbabwe had failed to attract investment over the past decade and official development assistance had been little, resulting in over-reliance on taxes for revenue generation.

The study established that government was aware of its short-comings especially in the mining sector and had proposed reforms in the legislation to increase revenue collection.

But many of the reforms, such as the draft Income Tax Act, still have to go through Parliament. And it is not clear how the lack of expertise in the ministry of Finance and Zimra will be addressed.

“It was acknowledged that the informal sector should be brought into the tax net but not much progress has been made on this,” reported the study.

Pasi indicated recently that government was working on a cocktail of measures to formalise small and medium enterprises so that they pay taxes and directly contribute to economic growth. Experts from South Korea will assist the government in formalising a sector that is said to hold $7,4 billion, most of which never — or only fleetingly — enters formal channels.

“One of the programmes we are also working on and government will avail soon is the self-service centres,” he said. “We are now going to be bringing ARMs (Automated Revenue Machines); again we have our technical partners, I am sure they should arrive this week so that we finish our project.

“It is high time we protected and formalised the SMEs in order to preserve their diversity. We need to focus on how to nurture and provide decent accommodation and operating environment.”

Pasi said Zimra could not merely wait to tax businesses, but should assist in properly structuring them.

He said SMEs could grow into big brands as has been the case with Samsung and LG.

“If we create order, we create areas where people can do honest business because every citizen must be proud of contributing to the nation by paying taxes,” he said.

The Zimra boss noted that chasing away vendors and other informal business people from the street was akin to chasing away revenue.

“We can’t have revenue when we chase people away,” he said. “We create order and create areas where people can do honest business and everyone must contribute to the development of nation. We need an innovative way of creating that.”

The Daily News is also reliably informed that Zimra is planning to introduce fiscalised machines on public transport vehicles such as kombis and taxis to ensure operators do not evade taxes.

“We said we needed fiscalised machines even in kombis such that the moment one starts driving it records to Zimra the mileage travelled and enforces charges per kilometre. We are going to start with five taxis which will be run as a pilot project so that when we roll it out, people will know what we are talking about,” Pasi said.

Comments (27)

This is a good idea, lets start with ministers like Saviour who are building mountain top mansions....

Watcher - 16 July 2014

Gershom Pasi may not last in this position. If Mugabe is letting the corrupt scot free. Letting diamond and other mineral looters free who does Pasi think he is . We know you have the interests of the people and country at heart but remember you are probably the only government-related company official with such a conscience

Khuluma Sikuzwe - 16 July 2014

Ndipo pamuchatanga kuona kuti hazvisi kufaya....apa nemapenalties ataxman muchazunzwa kusvika kunduwe!

Pondo nechumi - 16 July 2014

ko uyo ano owner half of bulawayo? mari yacho akaiwanepi ngaatange kupindura iye usati wapinda mudzimba dzevanu

doggyman - 16 July 2014

If any person is rich in Zimbabwe then you know that person is a thief. The country is so unstable there is no chance of running any business successfully. Asi kutengesa mbanje kani? Most of the money is ill-gotten.

Musona - 16 July 2014

A drive through suburbs like Glen Lorne where mansions are being built on hilltops will reveal how some people are filthy rich in a country where the majority are living on less than a dollar a day. Where are they getting that kind of money with the current economic state? Whatever it is they are selling, who are they selling it to when most of the people are unemployed and can not afford a cent to spare? The ministers, politicians, enterpreuner pastors and evangelists and all those closely connected to them- that's where the Taxman should start with guaranteed results.

Dr Know - 16 July 2014

You are trying Mr Pasi. Wealth tax should have been done a long time ago. I hope there will be no interference from cabinet. The government needs to sell off non performing parastatals. In UK the Royal Mail was privatised a few months ago and the UK gov got over £3 billion. What stops the Zim government from doing the same. NetOne should be sold immediately, biilions llocked in that entity alone. Unfortunately the cabinet is too old to be innovative.

James Zuro - 16 July 2014

Cde Pasi don't waste your time with the the South Koreans . In the eighties we had the Australians called the A Team. They collected so much tax the Gvt did not know what to do with it. They were eventually fired cos they were too efficient. Just swallow your pride call the back and do exactly as they say. Then see what happens

A Team - 16 July 2014

Cde Pasi don't waste your time with the the South Koreans . In the eighties we had the Australians called the A Team. They collected so much tax the Gvt did not know what to do with it. They were eventually fired cos they were too efficient. Just swallow your pride call the back and do exactly as they say. Then see what happens

A Team - 16 July 2014

What about working our butt out of the country will they take our house,we left the country cos the govt couldn't assist ours we did not toyi toyi to mismanagement ,now they have eaten the whole zimdollar,USA they want to eat us,hey just walk away zunu and put new blood

Jabesi - 16 July 2014

This is good news to the poor but in reality this will not yield any meaningful results as we all know what is happening in Zimbabwe. All the chefs are filthy rich. Ministers own half of Zimbabwe. The Mliswas kasukuweres Mpofus the list is endless.How about Gono and multiple farm owners. See it's the same people my friend who own farms,diamond claims, estates it is so confusing. I wonder if there is anyone who can tackle it now. Maybe some other generations to come.Even our robust President "The true iron man" has since resigned on this one, i mean the levels of corruption in this country.Let us see how Pasi wisdom will work

SHAVA - 17 July 2014

This is a case of thieves pointing fingers at each other. Pasi should start from his own officials who are all corrupt to the bone. If he is not corrupt, I wonder how he can work with people whom we all know to be corrupt. Billions have been lost with direct envolvement of ZIMRA.

selele - 17 July 2014

Good going Gershom but i can guarantee you that this will never see the time of day as the legislators and Minister who is supposed to guide you through the scum are the major culprits. Please can you start with cde fidza and his 57000 properties.

jacktheswede - 17 July 2014

the idea is good, but it has to be exercised with caution

muswe - 17 July 2014

This clearly demonstrates how clueless yet desperate this gvt is economically. Maybe it's time to expose thieves in the corrupt system...

NYANGADZI MUNYIKA - 18 July 2014

Have we run out of ideas to invite expertise from the Koreans. We have churned out graduates year in year out, let us pool their ideas and come up with something truly Zimbabwean to solve our problems.

thomas zuze - 18 July 2014

Gershom who is fooling who? When you went after the new farmers some farmer told you to visit him last. He phoned Harare amnd your officials never collected. Musatinyaudza. Idyai mari yenyu chinyararire.

Mavara Azarevhu - 18 July 2014

Ok they now want to go for the voiceless in the society,,but the ral culprits who are looting our wealth are leaving them ...verily verily these guys are not fair..God will punish them...

mangwana ndinhasi - 21 July 2014

And when all is done, we will then start at the beginning and be FDI friendly and transparent, have policy consistency through and through. You see you can rig and win an election, the economy is a different animal altogether.

matiki - 22 July 2014

start with Matibili and the entire cabinet, don't leave any one. Chombo must be the first example. as for the vendors, what profits are they making inorder to meet the tax threshold if there is any. this shows how desperate you are. eish

kt - 23 July 2014

Hehede zve govt zviri ku fire! Innovative ways to come up with tax revenue indeed! (1) farms (finite resource) but because they were not established into real income generating ventures, they indeed are income consuming ventures for they mostly need fertiliser and seed inputs year after year. We said it, land redistribution is fine but what manner of redistributing is this- impoverishing. I hear they are taking land from the ' remaining white commercial farmers' kikiki, it's finite, how about in two years time? (2) people's houses, fairly or ill-gotten , that is revenue maybe for another six months to a year:then what? (3) mega-rich pastors, how many of them are they to bring about meaningful revenue unless they believe in the diamond/gold raining prophecies/ diesel in the rick prophesies etc The list could be endless. The answer to most of these problems can be found in policies based on fairness, sustainability, vision and not necessarily in selfishness, cheating elections (am not sure but others say it happened) or invoking curses on ourselves by going after the anointed ones to get 'a poor man's sheep) to kill and yet you, yourself Mr Pasi as representing many like you have plenty sheep to kill and offer your guests. I have no economics degree like some if you but 'just common sense' tells me, hakuna kwezvinosvika izvi. Desperation yoga kwete inspiration inova yetinoda panguva dzakadai.

Ndareka - 24 July 2014

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