EDITORIAL COMMENT: Dodging taxes a sorry business

Among the vehicles seized by police during the ongoing registration blitz and gathering dust in various storage areas, mainly the borrowed central stores of Harare City Council, are some very expensive luxury cars and double cabs.

It should be a simple matter to get them out of police hands. The owners simply need to collect the number plates, except of course that it is not that simple, since they are not registered in the name of the person who thought they were the owner, and sometimes not registered at all.

Some of these cars, never on the tax records, simply appeared on our streets. So where did they come from? The police are not the only ones who would like to know; Zimra, the tax collectors are most anxious to know how someone can import anything that incurs duty, and a luxury vehicle incurs a lot of duty, without paying that duty.

Fairly obviously some of these vehicles were smuggled, and that can be difficult. Two national borders are rivers and while you can carry boxes while you paddle over the Limpopo or shove a few boxes inside a small boat as you row across the Zambezi, you cannot move a large vehicle. 

Even the parts of the Botswana or Mozambique borders that do not involve a river, still require a road, presumably an unofficial track of some sort. 

If someone is smuggling vehicles, what else are they smuggling? The authorities would like to know.

The other problem that some of those trying to fix the paperwork face, is that they never formally changed the ownership of a vehicle that was legally imported, and in some cases there is a chain of such buyers.

For some time a vehicle carries the same number plate throughout its Zimbabwean life, so any temporary difficulty in finding new plates should not have been a problem in many of these cases.

All the seller and buyer had to do was get the police clearance and then get the Zimra paperwork done, something that requires payment of a couple of fees.

Except, once again, a luxury vehicle has bigger transfer taxes than a small old car, so some people decided not to bother. 

They just paid the price, but kept the old owner as the owner of record, and now when they finally want a set of number plates they find they need to track down that old owner, to get the import documents, and quite possibly track down a whole chain of putative owners and hope that number one does still have the documents and did not just toss them out.

If the data base in the central vehicle registry showed a chain of owners from the first importer, well that is one of the reasons to have a proper database and it makes it easy for the last person on the list to pay the modest fee and buy a set of number plates if these were missing.

It seems a lot of the problems arose from an effort to evade taxes at the very least, and even perhaps to fence stolen cars from other countries in Zimbabwe.

The fact that the latest so-called owner, the one behind the steering wheel when the police took the car into storage, is the one now running around suggests that while they knew all the bits and pieces of paper were not correct they did not suspect any other crime except tax evasion.

One of the multitude of reforms of the Second Republic is the treatment of taxes; paying is now considered to be serious and necessary by everyone, not just a chosen few who cannot evade them.

The Government now lives within its budget, spending only what it raises in taxes and other fees, and consequently wants all that Parliament agrees it can raise to be raised.

This is one reason why the Ministry of Finance and Economic Development, and Zimra the collection agency, want all who might earn enough to pay taxes to be registered, even if they are subsequently found to be entirely in the zero tax band, and why it wants all customs and excise duties and VAT to be paid. It treats tax income very seriously.

This is one reason why incentives now appear in the presumptive taxes. For small business people who contract out their skills or services, the presumptive tax was pushed up from 10 percent to 30 percent. 

In many cases if that business person registered they might well pay less than 10 percent, with only people on surprisingly high incomes averaging 30 percent.

But the simple way of avoiding this level of tax is to register, and once you are on the list you stay on the list.

Part of the police effort to prevent people driving around with unregistered vehicles, or vehicles without number plates, or vehicles which are not licensed, was to ensure every vehicle was linked to a legal owner, and so making it easier when a car was used in a crime, such as robbery, to get the first person who could possibly create that chain of evidence which would eventually lead to a conviction.

But the effort was also to stop people dodging taxes. Problems in registration mean that someone in a chain has not paid, and perhaps everyone in the chain never paid. Unlicensed vehicles mean that the road taxes, the money that everyone needs to build, repair and maintain roads, were never paid.

Even when Zinara has a tax amnesty, that particular tax agency does not forget about unpaid licence fees. All that the vehicle owners who missed some payments get is exemption from the penalty fees. They still have to pay the actual taxes.

Somewhere in our post-independence journey not paying taxes became a lot more common. People in formal employment still had to pay PAYE, although some employers did not bother forwarding the money, and businesses still had to charge VAT, although again some was not forwarded. 

Now all that has to stop. Those who collect taxes for the Government, such as employers, have to forward them and those who need to pay themselves need to seek out Zimra and pay.

The results of missing tax payments are growing ever more severe, as some are now finding with a multi-million car sitting in storage and what appears to be an almost impossible journey to track down the right people with the right documents. 

If the owners had been aboveboard themselves at the very beginning and if they had insisted those selling to them had the right documents, then they would right now be driving around in a nice car with new plates, rather than gazing wistfully over the fence at what was their pride and joy.

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