ZIMRA cracks down on tax evaders, imposes $142 million in penalties

The Zimbabwe Revenue Authority (ZIMRA) has imposed penalties totalling ZiG142 million on taxpayers for non-compliance with tax regulations during the first eight months of the year, according to latest government accounts.

The figure significantly surpasses the target of ZiG28,6 million, indicating a widespread issue of tax evasion among Zimbabwean taxpayers. Some taxpayers were also delaying payments, taking advantage of inflation to pay at a later date when the value of the money would have been eroded by inflation.Some analysts say tax evasion remains a persistent challenge in Zimbabwe, as evidenced by the imposition of huge penalties on non-compliant taxpayers.
“The high level of tax penalties imposed by ZIMRA reflects a serious problem of tax evasion in Zimbabwe and of course capitalising on economic situation (loss of currency value due to inflation),” Harare-based analyst Carlos Tadya said.

“This not only deprives Government of much-needed revenue but also undermines the country’s economic development.”

Tadya said the Government needed to take urgent steps to address the root causes non-compliance such as weak enforcement mechanisms Tax reforms and increased transparency are essential to curb the problem, he added.

“ZIMRA must strengthen its enforcement efforts, including conducting more frequent audits and investigations. Additionally, the government should consider implementing stricter penalties for tax evaders to deter future misconduct,” said Tadya.

Last month, ZIMRA said it had noted with concern that some taxpayers have outstanding tax returns and or payments in the TaRMS system.

To address this issue, ZIMRA initiated taxpayer visits, phone calls, and audits blitz aimed at engaging taxpayers directly.

The approach is intended to enforce taxpayers to submit returns and to make payments of all outstanding tax obligations.

-ebsinessweekl