Zimra to review tax fines

Zimra to review tax fines
Published: 26 July 2018
THE Zimbabwe Revenue Authority (Zimra) is considering reviewing downwards interests and penalties on tax defaults amid revelations that a whopping $2 billion was charged in 2017, almost doubling the current gross tax debt.

According to the tax collector's 2017 report, out of a total tax debt of $3,96 billion as at December 31, 23 percent interest was charged amounting to $912,095,747, while 26, 69 percent amounting to $1,056,030,487 was charged in penalties.

The principal total debt minus the interests amounts to $1, 99 billion, constituting 50, 25 percent of the debt while penalties and interests accounted for 49.75 percent.

"….the levels of penalties and interests are very high and this is discouraging defaulters to pay their debts thereby contributing to the high debt we are experiencing," Zimra commissioner-general Faith Mazani said during a first ever annual general meeting recently, adding that "however, we are reviewing the interests being charged in an attempt to make them realistic and encourage defaulters to comply".

Stuart Comberbach, Corporate Governance Unit head in the President's Office, queried tax authority's capacity to recover the huge tax debt.

"What are the chances of recovering the owed amount because I realise that most of the debts are dating back to 2014?" he said.

In response, Zimra board chairperson Willia Bonyongwe noted that for as long as the debtors exist, frantic efforts will continue to be made to recover the debts.

However, Finance ministry secretary Willard Manungo said government is ready to advise the taxman on the possible steps to be taken in tacking the challenge.

"It is our expectation that the debt, which is largely rising on account of interest and penalties, will be addressed in the short to medium term through implementation of the Penalty Loading Model that government has already committed to. We need to sit down and find out how we proceed because the debt is getting out of hand," he said.

United Kingdom-based International Journal of Economics, Commerce and Management's survey established that reasons behind non-tax compliance in Zimbabwe were long distances travelled to payment offices and general apathy.

The study revealed that 75 percent respondents' attitude towards tax administration is unfavourable.

The journal recommended that there is need for government to review the tax percentage across various categories, to adopt online payment methods and to intensify tax education and public campaigns to bring tolerance and acceptance that taxation is a national duty and not a burdensome exercise, as viewed by the public


- fingaz
Tags: Zimra,

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