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Zimbabwe Companies Push for Reforms as Tax Arrears Bite

ZIMRA commissioner general, Geshom Pasi, is threatening to descend heavily on companies that are defaulting on taxes.

The Zimbabwe National Chamber of Commerce (ZNCC) is next week expected to approach the Zimbabwe Revenue Authority (ZIMRA) and the Ministry of Finance to discuss tax reform proposals designed to benefit the country’s struggling manufacturing sector.

This comes at a time when another deadline by ZIMRA for defaulting companies to pay up or negotiate a payment plan with the government expired June 30.

ZIMRA commissioner general, Geshom Pasi, is threatening to descend heavily on companies that are defaulting on taxes as the latest deadline expired last month.

Pasi is proposing the tightening of legislation and attachment of properties for companies that have continued to default though government has been extending deadlines since October last year.

But many companies are struggling to pay taxes to ZIMRA, thus risking having their properties seized.

Newly-elected ZNCC president, David Norupiri, says at the end of their annual conference Friday, they came up with a proposal for ZIMRA to change some tax laws and they will discuss it with government next week.

Confederation of Zimbabwe Industries president, Busisa Moyo, concurs, saying companies are struggling and ZIMRA’s move might worsen the situation.

Moyo adds that they have also engaged ZIMRA to discuss ways to end the crisis.

University of Zimbabwe economics professor, Tony Hawkins, says companies cannot pay taxes as the economic situation has worsened.

Hawkins says the Zimbabwe Agenda for Social and Economic Transformation (ZIMASSET) has failed to turn around the country’s economy and there is no political will to revive the moribund economy.

Norupiri though says sanctions imposed on Harare have had a negative impact on industries.

Private companies are not the only ones defaulting. According to a recent report from the auditor general’s office, 15 tax firms including the Zimbabwe Broadcasting Corporation and the National Railways of Zimbabwe have failed to remit taxes to ZIMRA. The 15 public companies failed to remit close to $450 million in tax arrears.

According to the Daily News, early this year, Pasi said ZIMRA was “very disappointed” by the number of applications received, as most defaulters did not respond to the call to address outstanding dues.

At the end of February, only 1,471 applications had been received, versus over one billion dollars owed to the authority in outstanding taxes.

The amnesty is in respect to any non-compliance which occurred during the period beginning February 1, 2009, to September 30, 2014, according to ZIMRA.