BERNARD MPOFU
A storm is brewing between the Zimbabwe Revenue Authority (ZIMRA) and one of its long-time whistleblowers over unresolved tax compliance cases and payment of fees penalties, it has been established.
The tussle has since escalated after a non-compliant firm structured deals for a local bank, car dealer and a listed company potentially prejudicing treasury up to $50 million in revenue. ZIMRA pays whistleblowers up to 10 percent of the recovered funds.
An investigation carried out by Business Times shows that there has been a series of correspondences between ZIMRA and the whistleblower since 2015 over a case involving Second Nominees (Pvt) Ltd which at the time did not have tax clearances but engaged a local agro-industrial concern, a bank, car dealer, gold miner and sugar firm.
This prompted an investigation by the Zimbabwe Revenue Authority in 2017 resulting in the recovery of $5 million from the agro-processor. But ZIMRA’s apparent reluctance raised the whistleblower’s suspicion that the authority wanted to protect other firms that were implicated in dealing with Second Nominees.
As recent as last month, the whistleblower also approached ZIMRA informing them about the revenue leakages. The whistleblower who also approached the Finance ministry and other authorities queried why the authority had only recovered funds from the agro-processor while other companies who worked with Second Nominees were not penalised.
“Second Nominees and (local bank) are separate persons for income tax purposes and therefore shouldn’t any payments between the two of them as well as any payments between each one of them and third parties be subject to the contractors’ tax in terms of Section 80 of the Income Tax (Chapter 23:06) if the recipient does not have a valid tax clearance certificate,” ZIMRA was notified by the whistleblower in August.
The whistleblower according to documents seen by this paper further asked the tax administration agency that if there was no loss to fiscus in this case, why would ZIMRA proceed to raise assessments, charge penalties and interests in cases where tax clearances are obtained subsequent to payments even if the recipient pays their income for the respective year.
The said transactions also implicated a ZIMRA commissioner who was placed on leave of absence after he allegedly demanded a bribe from a whistleblower.
ZIMRA in its response seen by this paper said the local bank paid withholding tax.
The authority also disputed that the fiscus could have lost millions in revenue.
Questions sent to ZIMRA spokesperson Taungana Ndoro yesterday were not responded to at the time of going to print.
Two years ago, the Confederation of Zimbabwe Industries (CZI)’s Zimbabwe Corruption in Business Survey revealed that the police and State Procurement Board were the most corrupt institutions in the country while ZIMRA also made it to the hall of shame as the third most corrupt.
Estimates show that the tax collector is losing millions annually due to corruption.
In its 2017 annual report, ZIMRA said it had toll-free hotlines to receive reports on corruption, carry out asset declarations and lifestyle audits on staff members as deterrents to corruption.
ZIMRA, which underwent a major shakeup of senior managers has introduced a cocktail of measures such as electronic cargo tracking to minimise revenue leakages at the country’s ports of entry.
Last year ZIMRA suspended 21 officials in the first half of the year and recovered $120 million through its anti-corruption drive following tip-offs from members of the public.
