ZIMRA warns against tax breaks for investors

ZIMRA warns against tax breaks for investors
Published: 15 June 2018
THE Zimbabwe Revenue Authority (ZIMRA) says government should not give tax concessions to investors that erode the country's revenue base as it seeks to drive up foreign direct investment (FDI).

ZIMRA Commissioner-General Faith Mazani last week said there was need to balance revenue collection efforts and "open for business" opportunities.

"We need to be aware of the fact that tax concessions, which are granted to investors, tend to erode the revenue base. Therefore, checks and balances to ensure that concessions extended to investors do not outstrip the envisaged benefits to the economy must be employed," Mazanhi said.

"For example, some companies in sectors such as mining are in perpetual losses while also receiving refunds. Some companies close at the end of the tax period and come in under new names for further concessions. Non-tax measures therefore also need to be considered to lure investors," she added.

ZIMRA said it was ready to play "gate-keeper" for government against unscrupulous investors who may want take advantage of the economic benevolence.

"ZIMRA expects that incoming investors will contribute not only their fair share of tax revenue but also in creating employment and economic development by bringing in new technologies. However, there should be a level playing field for existing businesses to ensure equal opportunities for both local and foreign investors," Mazanhi said.

According to ZIMRA, during the first quarter of 2018, tax expenditure or revenue foregone amounted to $1,019 billion, which is 47,80 percent of the total potential revenue of $2,132 billion for the same quarter.

ZIMRA has been dogged by allegations of corruption for years, but Mazani - who was appointed under the new Emmerson Mnangagwa administration, said her organisation had adopted zero tolerance towards the scourge.

"ZIMRA employs a number of strategies to fight the scourge. Use of hotlines for receiving anonymous information on corruption, a whistle-blower facility where informers are rewarded for information that leads to the recovery of tax revenue from reported defaulters and lifestyle audits covering the public and both managerial and non-managerial ZIMRA employees," she said.

The organisation is also struggling to keep up with technological advancements.

"We will invest in training and skills development in line with global technology and equip our staff improved service delivery. ZIMRA has invested a lot in technology. However, we are still operating in a manual environment. We will work hard to improve our processes by enhancing the use of our technological assets," Mazani said.

ZIMRA is currently offering a tax amnesty covering tax debts established on or before December 31, 2017 which ends on June 30. It is encouraging those who owe taxes to come forward and negotiate payment terms to clear their debts.

More than 50 percent of the current high debt to ZIMRA comprises of penalties and interest.

- fingaz
Tags: Zimra,


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