Manufacturers invading tax, Mutashu
THE Retailers Association of Zimbabwe president, Denford Mutashu, last week accused many businesses of evading tax by not issuing invoices for goods supplied.
“Many companies are now supplying the informal market and we have noticed that they are not issuing invoices which then makes it easier to avoid paying tax,” said Dr Mutashu.
“It is illegal and Government is losing a lot of potential revenue. The business must come to party and support Government initiatives to grow the economy,” he added.
Analysts have warned that re-dollarisation, compounded by the high informality of the economy would be detrimental to revenue collection efforts by the Government, the State-owned tax collecting agency since most transactions are cash-based.
About 80 percent of local transaction are now in foreign currency, according to official statistics.
Last year, Finance and Economic Development Minister, Professor Mthuli Ncube, warned that re-dollarisation, coupled with high informality would shrink the taxable base, as most transactions were “going underground where most activities are cash-based.”
He said Government would consolidate the stabilisation measures and strengthen tax collection efficiency through audits and other administrative measures.
Recently, the Zimbabwe Revenue Authority (ZIMRA) said it has put in place tight measures to close tax loopholes resulting from underhand U.S dollar transactions.
With most of the transactions being in cash, they are seen as favouring tax evasion.
In instances where businesses are using fiscalised devices that record sales and tax information by businesses on the read-only fiscal server directly linked to the tax regulator, some of the machines are not configured to record the U.S dollar transactions.
ZIMRA spokesperson, Gladmore Njanji, said while the level of compliance was generally satisfactory, they have noted several instances where some taxpayers were engaging in underhand transactions to avoid paying tax.
“When taxpayers were permitted to trade on foreign currency, we have seen a growth in revenue collections and improved transparency in accounting for the tax,” said Njanji.
“Due to other factors, some taxpayers are still reluctant to maintain proper systems for accounting tax in foreign currency. For this category we (conducting) audits and prosecution to enhance compliance. Our audits have been very successful showing there is some revenue being lost through underhand transactions.”-ebusinessweekly
