Zimra targets ill-gotten wealth
GOVERNMENT has directed the Zimbabwe Revenue Authority (Zimra) to widen revenue collection measures including pursuing individuals who evade paying taxes.
This was said by Secretary for Finance and Economic Development Mr George Guvamatanga yesterday, in a speech read on his behalf by the ministry’s chief economist, Mr Kudakwashe Mudereri, during a media briefing on Zimra’s five-year strategy (2019-2023).
Mr Guvamatanga said “ill-gotten wealth” was a menace and a threat to socio-economic development.
“We cannot have a situation where a few rich individuals who do not pay taxes are sustained by hardworking individuals who religiously pay taxes. In Statutory Instrument 246 of 2018, the Government may issue an ‘unexplained wealth’ order in respect of properties with no full disclosure.
“We expect Zimra to aggressively carry out lifestyle audits to flush out individuals who acquire ill-gotten wealth and those who create wealth without paying taxes,” he said.
Mr Guvamatanga challenged Zimra Commissioner-General Ms Faith Mazani to take measures that help grow the economy.
“I call upon the CommissionerGeneral of Zimra to lead the development and implementation of innovative domestic resource mobilisation strategies that will help transform the economy of Zimbabwe into an upper middle income by 2030,” he said.
Businessman and socialite Mr Genius Kadungure was arrested recently on allegations of evading tax amounting to $22 million.
Mr Guvamatanga ordered Zimra to locate other avenues of bringing in new taxpayers onto the tax register to help Government reduce the budget deficit.
He said it was critical to “develop and implement” strategies to plug revenue leakages.
Ms Mazani said they would do everything possible to track ill-gotten wealth.
Meanwhile, companies and individuals are set for a major tax relief in the coming year as Government is considering slashing the rate of penalties and interest levied by Zimra.
Apart from reducing the burden on taxpayers, the move is also designed to encourage tax compliance in line with Government’s thrust of “moving towards sustainable taxation” as captured in the 2019 National Budget.
“My expectation is that Zimra will play a leading advisory role in the development of simple and sustainable tax policies which include reduced penalties and interest.
“Furthermore, it is important that Zimra deepens revenue collection through improved voluntary compliance. This will be achieved through cooperative compliance programmes and efficient riskbased audits and tightened compliance enforcement strategies,” said Mr Guvamatanga.
The proposal to reduce tax penalties and interest comes at a time Zimra is struggling to collect the $4,5 billion tax debt that companies and individuals owe.
Of the $4,5 billion debt, the principal owed constitutes 52,6 percent while interest and penalties amount to 47 percent.
The private sector owes Zimra $3,6 billion, representing 80,45 percent of the total debt while parastatals owe $604,6 million (13,43 percent) and councils $275 million (6,11 percent).