Innocent Ruwende Senior Reporter
President Mnangagwa has urged individuals and corporates to embrace the culture of paying taxes, saying tax evasion leaves Government with limited funding options.
The Zimbabwe Revenue Authority (Zimra) is owed $4,5 billion by tax defaulters, among them private sector players and individuals.
Speaking at Zimra Taxpayer Appreciation Awards in Harare last night, the President said limited and erratic tax payments grossly constrain Treasury and increase Government’s inability to meet its budgetary requirements.
“It is, indeed, from these funds that the State is able to provide public goods and services, which include infrastructure, health care, education, housing, water and sanitation, among others. Tax evasion by individuals and corporates leaves Government with limited funding options,” he said.
“As we journey the course towards the attainment of our Vision 2030 and begin the implementation of the Transitional Stabilisation Programme, we must adopt a culture of voluntary compliance heightened by the desire to build the Second Republic.”
“I, thus, exhort ZIMRA to undertake robust, flexible and modern awareness campaigns to educate our citizens, small and medium enterprises and corporates alike, on their obligation to pay taxes.”
President Mnangagwa urged Zimra to accelerate the adoption of innovative and contemporary revenue collection, border management control and customs clearance systems as well as strengthen mechanisms that eliminate delays, smuggling of goods and revenue leakages.
Tax revenue, he said, was an essential component in the country’s quest to advance its industrialisation and modernisation agenda as it provides interest-free finance.
“This therefore makes the burden on us weighty, as the speed with which we grow, modernise and industrialise as a nation, will be determined by us all. To this end, I challenge Zimra, individuals and corporates to be exemplary in all dealings and resist all forms of corruption,” he said.
“Let us all walk in integrity, honesty and practise good corporate governance. My administration will neither be lenient to corruptors or the corrupted. Furthermore, I call for cordial and harmonious relationship between the taxpayer and the tax collector. In the Second Republic, it is imperative for all public entities to engage in continuous dialogue with clients and stakeholders.”
Finance and Economic Development Minister Mthuli Ncube said the country’s economy was showing dynamism, which has resulted in Government rebasing the size of the economy from $18 billion to $25 billion.
“Therefore, the activities of Zimra and efforts to collect more taxes going into areas which were uncharted territories such as the 2 percent tax and all its exemptions is an attempt to recognise that expansion in the economy,” he said.
“As Zimbabweans it is imperative that we embrace the new policy measures, which help stabilise our macro economy into the long term. You will not be surprised to hear that other nations copied the two percent transaction tax.”
He said a country in the northern hemisphere Europe had copied the tax regime.
Some of the biggest tax remitters who were honoured in various categories were Delta Beverages, OK Zimbabwe, Zimplats, Freight World, Barclays Bank and Seed Co among others.
“We are aware that you have a lot of work to do in the fullness of time but as of now, we also have to signal as the Executive and Parliament that we mean business on austerity.
“We are working on our Budget, I will present our Budget Statement, on November 22, 2018 at that stage I will say when I will provide the vehicles but as of now I am not yet ready to provide them,” said Prof Ncube.
Earlier in the day, President Mnangagwa yesterday said the business community should be mindful of the economic environment and plight of consumers when coming up with their pricing and marketing models.
The President said this while commissioning an $8 million dairy processing plant owned by ProDairy, a subsidiary of the Innscor Africa Group.
“As we revive, rebuild and grow our economy it is critical to be conscious of our pricing and marketing models,” President Mnangagwa said.
“Let us always be mindful of the broader economic environment and the plight of consumers across the social strata. Following my Monday dialogue with representatives of the business sector, I am encouraged by the positive reflections, thereafter, which have seen some suppliers beginning to reduce prices.”
He added that some companies had abused the protection they got from Government when it introduced Statutory Instrument 64.
“Some two or so years ago we introduced the SI 64, I was behind that one. We wanted to encourage and capacitate domestic manufacturing and to that extent I think we succeeded. I was only disappointed two weeks ago when some of the manufacturers whom we intended to protect were now hoarding and not releasing products to the consumers.
“This is why I have now amended SI 122 to allow temporarily the inflow of some of the basic commodities, which are coming into the country,” the President said.