'Tax compliance level less than 40 percent':

THE Zimbabwe Revenue Authority has embarked on a drive to engage tax payers in an effort to shore up tax compliance levels that have seen only a few businesses bearing the burden of tax in an economy that relies mostly on domestic resource mobilisation to survive.

According to Zimra Commissioner General Ms Faith Mazani, not more than 300 000 taxpayers are registered on the Zimra database and of that figure, compliance levels are currently at less than 40 percent.

“The level of tax compliance among our clients is very low at the moment and this is analysed from the payments and returns submitted. Many taxpayers are not on the ZIMRA tax register and for those on the register, a few are compliant,” she told stakeholders at a meeting in Mutare recently.

“Of the 511 059 returns expected for the First Quarter of 2018, filing compliance levels stood at 23 percent and 39 percent for PAYE and VAT respectively.”

Ms Mazani said the situation had resulted in a few taxpayers shielding the tax burden which should have been spread evenly among many players.

She said it was important that all business be tax compliant to reduce the tax burden through sharing and enhance economic development.

“The development path Zimbabwe is going for requires Government to work towards developing policies that promote sustainable domestic resource mobilisation (DRM). DRM is touted as the best path to sustainable development finance,” she said.

Ms Mazani reiterated that domestic resource mobilisation not only provided Governments with the funds needed to alleviate poverty and deliver public services, but was also a critical step on the path out of aid dependence and economic development.

“Our country, like most developing countries, continues to be a victim of base erosion and profit shifting, with huge multinational companies exploiting gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations.

These realities call for proactive actions on our part to craft taxa- tion policies that address these glaring imbalances which continue to expose our economies to the vagaries of the ever-globalising world economy,” she said.

Zimbabwe’s tax debt currently stands at over $4billion as at end of May 2018. Ms Mazani said this was a sign that Government had allowed some businesses to operate even though they owe taxes hence the need to re-engage and come up with ways to increase compliance.

“From the engagements I have had, I realised that because of the pressures to meet targets, we had created enemies of taxpayers. We want to encourage voluntary compliance,” she said.

“We need to work on bringing on board those that are outside the net and help them comply.”

Ms Mazani admitted that the current penalty provision promotes non-compliance and had led many businesses to downsize or close shop as they failed to carry the burden of tax.

She however urged businesses to take advantage of the tax amnesty before its expiry next week to ensure that they are not penalised for not remitting taxes.