Zimra warns forex tax dodgers
THE Zimbabwe Revenue Authority (Zimra) has said days are numbered for businesses that charge in foreign currency but receipt in local dollar terms to avoid tax.
This comes amid concerns about tax leakages in the economy especially fueled by smuggling, illegal trading and underground transactions under which some businesses charge in foreign currency and evade paying tax on the same terms.
Delegates at the just-ended Zimbabwe Economic Development Conference (ZEDCON) here last week expressed concern over tax leakages and evasion by some sections of the economy.
illegal trading
They also said Zimbabwe was levying high corporate tax when compared to regional peers and implored Zimra to plug the leakages.
Responding to the concerns, Zimra director for research strategy and innovation, Mr Joey Shumbamhini, said the tax collector will continuously employ measures to track underground transactions and plug tax leakages in the economy to expand its tax base.
“The underground transactions is an area of concern for the authority where we find some businesses charging in foreign currency but receipting in local currency. This is illegal and we continue to come up with measures like raising awareness that consumers should get receipted in the currency they used,” he said.
Zimbabwe Revenue Authority (Zimra)
“As for revenue leakages we have come up with strategies like use of drones to monitor activities so that we harness revenue in that area.”
Mr Shumbamhini invited academic institutions in the country for partnerships in research so as to drive the country towards evidence-based policy making.
“We want to partner in research so we advise Government accordingly on the issue of finance and revenue,” he said.
Taxes
“So, all academic institutions let’s engage in partnerships. We should engage so that we put the practical side of research papers.”
Mr Shumbamhini said there was a co-relation between revenue collection and gross domestic product (GDP), also known as ‘net revenue to GDP’, which is used to compare the country with the region.
Despite concerns from researchers about high corporate tax in Zimbabwe, Mr Shumbamhini said
corporate tax in the country is within the regional levels.
He said the authority is aware that there is a large informal economy hence the need for research on its size.
“This will help us identify and evaluate revenue gaps that we are missing. Yes, we are exceeding target in revenue collections but we need to know what we are missing,” he said.
About 70 percent of Zimbabwe’s economy is driven by the informal sector, according to researchershence the need to find ways of taxing the sector.
Participants at the meeting said Zimra should come up with a model to increase its tax base by taxing the digital economy where some of the transactions are happening virtually.
President Mnangagwa officiated at the conference, which ran under the theme:
“Accelerating Economic Transformation through Evidence Based Policy Formulation”. — The Chronicle
