ZIMRA wobbles under tax non-compliance

PHILLIMON MHLANGA

The Zimbabwe Revenue Authority (ZIMRA) is battling unprecedented high rate of non-compliance, fraud, lack of cooperation and failure to submit returns, among other problems creating problems for the government which depends on taxes to finance operations.

The non-compliance has left the government on the edge as it has no external budgetary support.

The worsening economic crisis characterised by company closures and downsizing, most businesses in the country are finding it difficult to honour their tax obligations.

ZIMRA’s head of technical services, Mathias Chinanayi, who spoke at the KPMG IFRS and Business meeting held in the capital last week, said this presents a major challenge for the tax collector in this current fiscal year, worsening the already challenging economic outlook.

Now, the severe headwinds ZIMRA is confronted with are threatening government operations as some companies under report their profit and evading and avoiding paying tax.

With companies struggling to remain afloat due to economic problems, the government now relies on tax heads such as excise duty and value added tax to meet its revenue targets.

Chinanayi lamented the low tax compliance levels in the country as this is increasing the burden on the few who are compliant.

“We are challenged in various forms of non- compliance, starting from lack of cooperation, processing of fraudulent documents, failure to submit returns, pay tax keeping records,” Chinanayi said.

He added: “Our border posts are areas of concern for a number of reasons. But we believe weak infrastructure makes it quite a cumbersome adventure to provide excellent service.”

The government could be losing millions of dollars in potential revenue due to under declaration, false classification of goods by importers to invade paying the correct taxes as corruption takes its toll.