The Zimbabwe Revenue Authority (Zimra) has adopted a lenient stance towards errant businesses that are yet to reduce value added tax (VAT) to 14,5% from 15% in compliance with a new tax regime that kicked in January, choosing to promote voluntary compliance ahead of possible punitive measures.
Information gathered by Business Times shows a crunch board meeting held late January to map a strategy and ensure compliance was divided over the issue but eventually resolved for voluntary compliance.
Meanwhile, some taxpayers continue losing their hard earned dollar to uncompliant businesses that are yet to comply citing various reasons such as problems in reconfiguring fiscal devices being used by some retail outlets.
Zimra, through its PR office, said it is not keen to punish its taxpayers; instead preferring to enter into partnerships with taxpayers in which voluntary compliance is the main thrust.
Apart from that, Zimra carries out inspections to ensure compliance to the new laws and the correct configuration of the VAT rates for fiscal devices.
“Compliance checks are also done through audits and taxpayers found not complying are dealt with in accordance with the law.
Penalties may be applied as a last resort after education,” Zimra said, adding VAT refunds are thoroughly checked to ensure that clients are not receiving undue refunds.
“Education workshops are already under way covering the first quarter of 2020, Zimra carries out taxpayer education every time there is a change in legislation in order to ensure taxpayers understand the changes and apply the law correctly,” Zimra added.
Zimra in 2019 published a public notice to alert taxpayers of the implications of the change in the VAT rate.
Meanwhile, Zimra introduced traffic check points on major roads from border posts as well as post clearance verifications and border patrols as part of efforts to plug revenue leakages.
Electronic cargo tracking and scanning technology is also being utilised to reduce leakages that are costing the country billions in potential tax revenue at a time budgetary demands are on the rise.
This comes after Zimra in its revenue performance report of the fourth quarter of 2019 said it is intensifying efforts to plug revenue leakages, fighting and preventing corruption by Zimra staff members and clients.
In the report, Zimra said the strategic partnerships with the Zimbabwe Anti-Corruption Commission were yielding positive results in terms of prevention and detection of corruption.
“Measures to plug revenue leakages through smuggling include, but are not limited to traffic check points on major roads from border posts, post clearance verifications where officers verify the correctness of documents that were used during clearances and border patrols which are combined operations involving other border security agents,” the authority told Business Times.
“Our borders are porous with so many illegal entry or exit points, meaning a high risk of smuggling through these numerous points.
“This can be mitigated by random border patrols, intelligence- driven post clearance verifications which entails acting on information or intelligence received,” added Zimra. Other government enforcement agents also refer cases of smuggled goods or vehicles for action by Zimra.