Zimra ex­ec­u­tives in tax eva­sion scan­dal

Chronicle (Zimbabwe) - - National News - Lloyd Gumbo Harare Bureau

ZIM­BABWE Rev­enue Author­ity ex­ec­u­tives in­clud­ing Com­mis­sioner-Gen­eral Mr Ger­shem Pasi evaded pay­ing tax on some of their em­ploy­ment ben­e­fits prej­u­dic­ing the rev­enue col­lec­tor hun­dreds of thou­sands of dol­lars, it has emerged.

Iron­i­cally, it is Zimra’s chief man­date to col­lect rev­enue on be­half of Govern­ment.

A foren­sic au­dit car­ried out by a lo­cal firm, HLB Zim­babwe mid this year, re­vealed that the author­ity’s ex­ec­u­tives re­neged on their obli­ga­tions to con­trib­ute to the State purse.

“We ob­served that Zimra ex­ec­u­tive direc­tors were not pay­ing Pay As You Earn (PAYE) on some of their em­ploy­ment ben­e­fits such as their school fees, mo­tor ve­hi­cles and hol­i­day al­lowances,” reads the au­dit re­port.

“The ben­e­fits in ques­tion were grossed up (for tax pur­poses) and Zimra paid tax on be­half of the ex­ec­u­tive direc­tors. This is not stip­u­lated in their em­ploy­ment con­tracts, which specif­i­cally re­quires ex­ec­u­tives to pay their own taxes in com­pli­ance with the In­come Tax Act.”

The au­di­tors said Mr Pasi also de­clined to pay his tax obli­ga­tions aris­ing from his un­war­ranted board fees be­tween 2011 and 2013.

“The said fees were not taxed, in vi­o­la­tion of the In­come Tax Act.

As a con­se­quence, an amount of $9 119.37 in un­paid PAYE and Aids Levy ac­crued.

“When the er­ror was dis­cov­ered by the Hu­man Re­sources (HR) depart­ment on the 24th of June 2013, Mr G Pasi de­clined to set­tle the PAYE over a pe­riod of six months as sug­gested by HR.

“In­stead, he opted for PAYE to be re­cov­ered from his fu­ture board fees as and when they fell due. No penal­ties and in­ter­est was claimed from Mr G Pasi, again in vi­o­la­tion of the In­come Tax Act.

“Our in­ves­ti­ga­tion also re­vealed that dur­ing the pe­riod un­der re­view, Mr GPasi re­ceived board fees in the sum of $16 200 in spite of the fact that he is not a Non-Ex­ec­u­tive Di­rec­tor of Zimra.

“In line with best prac­tice ex­ec­u­tive direc­tors are not en­ti­tled to board fees. We rec­om­mend that board fees should be paid to non-ex­ec­u­tive direc­tors only,” said the au­di­tors.

The au­di­tors found that Zimra Di­rec­tor for Hu­man Re­sources and Ad­min­is­tra­tion, Ms Chris­tine Msem­buri was one of the cul­prits who evaded pay­ing tax dur­ing her sec­ond­ment to the Re­gional Of­fice for Ca­pac­ity Build­ing in Kenya from Oc­to­ber 2012 to Septem­ber 2015.

“Over the three year pe­riod of Ms Msem­buri’ sec­ond­ment, she earned in­come in ex­cess of $850 000 from Zimra, which should have at­tracted in­come taxes ap­prox­i­mately $350 000,” said the au­di­tors.

“These taxes were never col­lected by Zimra. Such non­col­lec­tion was done with­out valid tax di­rec­tives. Zimra has no proof that Ms Msem­buri paid any taxes in Kenya, which should be the pri­mary ba­sis on which any tax cred­its could be af­forded to the then HR di­rec­tor.

“In fact, Zimra only is­sued back­dated tax di­rec­tives in May 2015 con­trary to prac­tice (tax di­rec­tives are prospec­tive and not retrospective.

“These back­dated di­rec­tives were meant to le­git­imise Ms Msem­buri’s non-com­pli­ance with tax laws over the pre­ced­ing two and half years. This was clearly an abuse of of­fice as any other tax payer in a sim­i­lar sit­u­a­tion would not have been al­lowed to vi­o­late the tax leg­is­la­tion with­out any ac­tion be­ing taken by Zimra.”

The au­dit re­port re­vealed that Zimra ex­ec­u­tives earned about $15 mil­lion in salaries and em­ploy­ment ben­e­fits.

Of­fi­cials from the Air Force of Zim­babwe at the scene of the ac­ci­dent yes­ter­day

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