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News Hit

Zimbabwe Revenue Authority is Claiming $4.7 billion of Unpaid Taxes

5 years ago Ablejam

Zimbabwe Revenue Authority (ZIMRA) is owed a total of $4.7 billion in unpaid taxes by several companies and government departments indicating serious losses in revenue.

The taxman’s 2019 annual report shows parastatals owe $1.02 billion, local authorities, $174 million while the private sector owes $3.4 billion.

Out of the total debt ZIMRA only managed to recover $186 000.

“The principal debt constitutes 56% of the total debt and the balance is made up of penalties and interest. The debt reduction of 4.91% is a reflection of intense compliance and debt recovery and reduction strategies undertaken during the year,” the ZIMRA annual report reads.

“These include engagements with taxpayers to agree on payment plans, proposals for debt set off with the government, withholding, and set off refunds due to clients for debt set off with the government.”

An analysis of the tax heads show the debt in respect of Value Added Tax (VAT) is $1.1 billion, Pay As You Earn (PAYE) $509 000, income tax $677 000, withholding tax $241 000 and customs duty $148 000.

The principal debt stands at $2.6 million while interest accrued $805 000 and a penalty of $1.3 million.

The swelling debt has prompted market watchers to urge the government to consider scrapping interest and penalties as a strategy to encourage debtors to pay up.

The private sector has also blamed ZIMRA’s heavy handedness on taxation measures saying it does not encourage the thriving of formal businesses.

But ZIMRA is optimistic that the new legislation processes will result in a smooth recovery of the debts and bring a final solution to the problem.

“The revised legislation for the implementation of expedited procedures to recover outstanding tax debts was gazetted. The authority engaged with the President of the Fiscal Court and other stakeholders with regards to the backlog of revenue cases, which culminated in the Judicial Services Commission appointing retired judges to work on the backlog of cases,” the report added.