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Minister Chinamasa

Lloyd Gumbo Senior Reporter
The Zimbabwe Revenue Authority will name and shame tax evaders, as Government seeks to increase efficiency and effectiveness in tax collection. Members of the National Assembly approved the proposal on Tuesday after they unanimously passed the Finance Bill steered by Finance Minister Patrick Chinamasa.

There are indications that there are several public officials and private firms that have been evading tax, prejudicing Government of much-needed financial resources.

The Finance Bill seeks to, among other things, give effect to the revenue measures that Minister Chinamasa announced in the 2015 Mid-Year Fiscal Policy Statement as well as protect Air Zimbabwe assets from being attached by creditors.

“Mr Speaker Sir, in order to enhance efficiency in the operation of Zimra, as well as improving compliance to legislative requirements by taxpayers, I proposed to amend the legislation to provide for the publication of names of convicted tax offenders,” said Minister Chinamasa.

“Mr Speaker Sir, the Bill also seeks to invoke the provisions of the State Liabilities Act in order to protect Air Zimbabwe Corporation’s assets from attachment by its domestic creditors. The protection will expire on the 31st of July 2018.”

Minister Chinamasa said Government expected the national airline to have improved its fortunes by then.

He said the Bill sought to legislate for revenue measures aimed at enhancing industry productivity, raising additional revenue, providing tax relief and enhancing efficiency.

Parliamentarians passed the Bill without amendments, meaning that once passed into law, Zimra will be able to name and shame tax offenders.

Minister Chinamasa also justified the proposed amendments to the Banking Act whose objective was to enhance integrity of the banking system by addressing vulnerabilities that threaten the stability of the sector.

The Bill focuses on good corporate governance, credit risk management, consumer protection and troubled banks’ resolution framework that he said were in line with the recommendations set by the Basel Committee on Banking Supervision as well as regional best practices.

“Poor corporate governance has been identified as a major cause of bank failures in Zimbabwe,” said Minister Chinamasa. “This is due to the fact that the quality of decisions and the implementation of the decisions affect the performance of institutions.

“To reduce conflict of interest arising from multiple and interlocking board memberships, the Bill will restrict the number of board members for directors of banking institutions.

“Non-executive directors of banking institutions will not sit on the boards of more than five registered companies, including the board of the banking institution on which the director sits. A director with executive functions in other companies should not sit on the boards of four registered companies, including the banking institutions on which the director sits.”

Minister Chinamasa said the Bill also discourages shareholder representatives from exerting inappropriate pressure on the board and undermine the independence of the board.

As such, he said, the board should have the capacity to make independent decisions that serve the best interests of the banking institution and the depositors.

“The Bill will penalise shadow directors like shareholders who direct board decisions behind the scenes when they are not part of the board. These shadow directors compromise the independence and objectivity of board decisions,” said Minister Chinamasa.

“Shareholding limits for individuals in banking institutions will be reduced from 25 percent to 10 percent of share capital. This is aimed at reducing the risk of bank failure arising from undue influence by individuals through a diversified shareholding structure.

“Shareholding limits for non-financial corporate entities shall be raised from 10 percent to 25 percent of share capital.”

Minister Chinamasa said the Bill would also strengthen the regulation of insider loans whose proliferation had been a major cause of bank failures.