THE amount of tax outstanding to government has reached US$1 billion, highlighting the escalating crisis in the country characterised by company closures and job losses, the Financial Gazette can report.GERSHEM WEBAt US$1 billion, the figure is double the outstanding tax amount for the period 2009 to 2012, which we previously reported at US$500 million.

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This partly explains the precarious position enveloping government finances, which has not been helped by the decision to award civil servants a salary increase in 2013 and a 13th cheque for the 2014 calender year.

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Since then, the payment dates for government workers’ salaries have become more of a moving target, dependent on the availability of funding from the Zimbabwe Revenue Authority (ZIMRA).

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ZIMRA officials confirmed this week that the taxman is now owed a whooping US$1 billion in taxes.
\n“…the figure is now over a billion dollars. That is reality,” said George Chiradza, a ZIMRA commissioner responsible for domestic taxes.

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He was addressing a tax conference organised by auditors, EY.

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Apparently, ZIMRA embarked on a blitz to force companies to pay outstanding taxes after government finances deteriorated to the point of almost grounding State operations to a halt.

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The move resulted in many companies having their bank accounts garnished, and several are reported to have closed as a result.

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But Chiradza insisted ZIMRA was very sensitive to the plight of industry and, in fact, said they were very lenient in dealing with most cases of tax evasion and default.

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“If we did not (become lenient), a number of companies would have folded. We tried to help each other for economic development. We need to build strategic relationships with business, with zero tolerance to corruption, because it is robbing the nation and we need to put a rein on that,” said the ZIMRA boss.

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In her audit report for the period 2009 to 2014, the auditor-general, Mildred Chasi, pointed out that outstanding revenue amounted to US$508 224 725 as at December 31, 2013, with over US$240 million representing debts outstanding as far back as 2009.

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She indicated that there was a greater risk that the US$240 million “may not be recovered due to the lapse of time” and advised Treasury to work together with ZIMRA to address the issue of companies that had ceased operations but still owed government taxes.

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Chiradza said the taxman had enough capacity to monitor and collect all revenues due to Treasury at any given time, adding that in the case of the mounting defaults, the authority was aware that a heavy handed approach to defaulters would plunge frail firms into worse circumstances.

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Last week, the National Association of Non Governmental Organisations (NANGO) warned that the country risked plunging into an unprecedented crisis worse than the hyperinflationary era that ended with dollarisation in 2009 if bold steps were not taken to expand fiscal space. However, there has been a public outcry against ZIMRA’s hostile enforcement against defaults in Value Added Tax, Corporate Tax and a string of fees and charges that has left hundreds of firms belly up, or tottering on the brink. – FinGaz