The Confederation of Zimbabwe Industries (CZI) has appealed to Government to rein in the State revenue collector, the Zimbabwe Revenue Authority (Zimra) over unceasing raids on struggling local businesses for alleged tax misdemeanors.
With a shrinking formal sector, Zimra is under pressure to deliver as it is the main source of funding for Government expenditure.
The tax collector provides up to 98 percent of Government revenues.
Economic challenges the country is going through, have over the years seen the formal sector being replaced by the informal sector as the centre of economic activity.
And Zimra has found the going tough to collect taxes from the informal sector, leaving it to deal with the formal businesses.
CZI president Busisa Moyo appealed to Finance and Economic Development Minister, Patrick Chinamasa to control Zimra to ease up pressure on the raids and its culture of penalising already struggling firms which are doing their best to remain operational.
“There are a lot of Zimra audits that are going on right now and there are a lot of challenges there,” Mr Moyo said at a post 2017 National Budget meeting.
He said while most companies were willing to “be good citizens and pay taxes” the tough operating environment made it difficult for most to keep up to date with their obligations.
“Some small companies are being asked to pay penalties of as much as $1,5 million. We are inundated with these sort of situations. We must look at this carefully because we are in a delicate situation and we do not want to undermine our own efforts to grow the economy,” the CZI president said.
Mr Moyo said even companies that were enjoying Government protection under recently imposed import restrictions on a number of goods were also being affected by the Zimra raids.
Observers have criticised Zimra for its heavy handedness which some say is the main reason why most firms in the small-to- medium enterprises sector tend to remain informal.
Two years ago, Government through Zimra, gave tax defaulters an amnesty period to pay up their dues which had the penalties set aside.
The amnesty deadline was, however, extended two times up to the end of 2015 as most businesses were not forthcoming.
The tax collector is owed billions of dollars in unpaid obligations. — New Ziana.