THE Zimbabwe Revenue Authority is carrying out impromptu visits to State enterprises and parastatals to establish their levels of tax compliance in view of salaries and perks for top managers. Sources said the exercise is mainly aimed at establishing whether salaries and other perks for top management at the institutions were being properly taxed.
“Last week eight Zimra officials paid us an impromptu visit and demanded all documents relating to salaries and allowances paid to top management.
“The officials who clearly meant business spent the better part of the day going through several documents in various offices that deal with management affairs such as the accounts and human resources departments and interviewed the heads and staff that work in those departments after which they left,” said one of the sources who spoke on condition of anonymity.
It was, however, not immediately clear how many State enterprises and parastatals had been visited by last week.
Zimra’s acting director, legal and corporate services Mr Tichawona George Chiradza said the exercise was part of the Zimbabwe Revenue Authority’s ongoing efforts to enhance revenue collections in line with its mandate as enshrined in the Revenue Authority Act [Chapter 23:11] and other subsidiary legislation which the Authority administers.
“This initiative you mentioned is part of ongoing exercise aimed at checking on and improving compliance levels,” he said.
“However, ZIMRA uses a number of strategies to ensure that what is due to the State is paid on time and in full. These strategies are not limited to door-to-door compliance checks and audits, which you have alluded to.”
The impromptu visits come on the back of reports that some heads of State enterprises and parastatals have been earning mega salaries and allowances, which have raised questions on whether these were being properly taxed and whether the taxes were being remitted to the appropriate authorities.
Meanwhile, Zimra has suspended the attachment of property belonging to defaulting tax payers to give them room to raise money to pay off their arrears, a senior official said.
ZIMRA head of audit for Manicaland Mr Willy Chishakwe said the order was issued recently to give room to tax payers to craft payment plans.
“Most companies have been complaining about the tax burden and some of them ended up failing to pay the tax completely leading to the attachment of their property.
“The order came from the commissioner general Mr Gershem Pasi who thought it was proper to come up with such a move,” said Mr Chishakwe.
Most companies have been pleading with Government for temporary exemption from paying tax due to the liquidity crunch.
Mr Chishakwe said ZIMRA is urging tax payers to come up with payment plans that will help them to pay off their arrears while remaining operational.
“Since dollarisation of the economy most of the companies have been struggling and accumulating tax arrears leading to attachment of property and we think the suspension of property attachment by the commissioner general will give firms space to recover and improve production, which will increase revenue collected,” said Mr Chishakwe.
Close to 100 companies shut down between 2012 and last year. The few surviving firms are presently saddled with huge debts and battling with low capacity utilisation largely due to antiquated machinery and lack of working capital against high labour costs.