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Mr Charles Msipa

Tendai Mugabe Senior Reporter
Captains of industry have urged the Zimbabwe Revenue Authority to reconsider its radical approach on tax collection, warning that such moves may plunge different sectors into death throes.
In recent months, zimra has been on a nationwide operation, ganishing accounts of several corporates to ensure that they settle their outstanding tax statutory obligations.

In separate interviews yesterday, the captains of industry noted that zimra had an obligation to collect tax, but a harsh approach on the matter might bring about closure of most companies which were already saddled with serious viability challenges.

They argued that the matter called for a different approach that ensures viability of the industry. Confederation of Zimbabwe Industries president Mr Charles Msipa, said zimra should strive to formulate a more palatable way of collecting tax which does not cripple operations of the companies.

“zimra has an obligation to collect tax payments,” he said. “All of us as individuals or corporates have an obligation to pay tax, but we are in an exceptionally challenging environment which probably calls for a different approach.

“Many companies are in financial distress and they have statutory obligations that they have to meet, including zimra taxes. zimra can play an enabling role by agreeing on a more realistic payment arrangement.”

Former CZI president Mr Kumbirai Katsande, said failure to meet statutory obligations was a sign of a depressed economy.

“This is not a normal business situation,” he said. “If a company fails to meet its statutory obligations, that is a sign that the company is going down and at times its workers are going for months without salaries.”

Mr Katsande said they were engaging zimra on the matter to find common ground that ensures sustainability of the industrial sector.

Zimbabwe National Chamber of Commerce president Hlanganiso Matangaidze described ganishing of accounts as a recipe for disaster.

He said legally zimra had the right to ganish accounts, but the country was being confronted by an abnormal economic situation.

“zimra should engage the companies and find the best way forward,” he said. “The tax revenue base will not improve because of this, but it will continue to shrink because more companies will continue to close down.”

Mr Matangaidze said it was imprudent for zimra to consider taxing small businesses as they were still at the infant stage where they required Government support.

Another industrialist who refused to be named said Government was the biggest debtor, yet it expected companies to pay Value Added Tax at the end of the month.

“This whole matrix becomes vexing if you try to think who owes who,” he said. “Government itself is our biggest debtor and it actually calls the expertise of a rocket scientist for zimra to expect companies to pay tax when they are being owed by their customers, which happens to be Government itself.”

Speaking in Parliament yesterday, Deputy Minister of Finance Dr Samuel Undenge said companies should pay their dues, but if they failed, zimra should consider a payment plan.

He said zimra would descend heavily when companies tried to dodge from paying tax.

“Let me remind you of the Biblical statement that was given by Jesus that pay unto Caesar what is due to Caesar,” he said. “Of course zimra, when you do not pay your tax, they are bound to take some action. However if there are circumstances beyond your control I think zimra makes some arrangement with you to pay.”

Dr Undenge was responding a question from Masvingo Urban legislator Cde Daniel Shumba, who had said that Zimra’s actions on tax collection were crippling industries.