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Daniel Nemukuyu Senior Court Reporter
The High Court will soon rule on a test case in which Edgars Stores (Private) Limited is challenging a Statutory Instrument that gave the Zimbabwe Revenue Authority power to impose civil penalties on shops that do not install electronic signature devices on their tills.
According to SI153 of 2011, all points of sale (tills) for Value Added Tax-registered traders have to be connected to Zimra to inform the authority of any sales made for taxation purposes, failure of which a daily penalty of US$25 per till is imposed without going to court.

Edgars argued that the Statutory Instrument took away their constitutional right to be heard in court. It was also argued that the SI153 of 2011 was inconsistent with the Value Added Tax Act, which permits Zimra to impose fines for non-payment of taxes.

Non-installation of the electronic signature device, according to Edgars, was divorced from non-payment of taxes.
Several companies have been fined for failing to comply with SI153 of 2011 and most of them cited the high costs and technical procedures associated with installation.

Edgars was slapped with a US$187 100 penalty and now wants the SI quashed on the basis that it is inconsistent with the Value Added Tax Act and in breach of the Constitution of Zimbabwe.

Justice Erica Ndewere heard arguments from both parties on Thursday and reserved judgement.
Advocate Thembinkosi Magwaliba represented Zimra, while Mr Paul Paul acted for Edgars.

The clothing firm listed Finance and Economic Development Minister Patrick Chinamasa and Zimra Commissioner-General Mr Gershem Pasi as respondents.

The company, through director Mr James Galloway, argued that the Value Added Tax Act only permitted Zimra to impose a penalty for defaulting on taxes.

Comm-Gen Pasi filed an opposing affidavit, saying although the installation of tax deduction devices was complicated and highly technical, the companies were given enough time to comply.