Thursday, 21 April 2016

ZIMRA TARGETS THE RICH

The Zimbabwe Revenue Authority (Zimra) has launched a new blitz on high net-worthy individuals and corporate leaders, as President Robert Mugabe’s government seeks to raise $100 million-plus to plug biting cash shortages.


In a move that has been slammed as “desperate, unconstitutional and likely to push the economy aground”, Gershem Pasi’s organisation has whipped out a six-page letter to various company chief executives and businesspersons asking about numerous things ranging from home improvements, monthly living expenses, number of dependants, international trips, entertainment habits and other things.

“ . . . as part of the on-going tax compliance check exercise, I kindly request you to complete the attached questionnaire within seven days . . . Note that you are also hereby given the opportunity to voluntarily disclose any outstanding taxes that you have become aware of and pay accordingly,” he said in a recent letter signed by one S. Muremba on Pasi’s behalf.
And as the Daily News was told yesterday that Pasi, and his Finance ministry bosses were targeting at least 500 to 1 000 Zimbabwean high-flyers, it has also emerged that Patrick Chinamasa’s team was hoping to raise anything between $100 million to $200 million from these targeted individuals, and corporates.

And as the market tries to digest the controversial move, and its implication on people’s income tax payments, experts said this would automatically raise bands beyond the current 45 to 50 percent threshold.

In the meantime, companies are already taxed at between 25 to 30 percent — meaning Zimbabwe would cement its status or position among the heavily taxed nations.
As Pasi and company have sought to know how many “smokes, money spent on pools, computers, air condition, refrigerators and extended family support” since 2010, it is understood that a number of bankers, industrialists and politicians had received these “shock letters”.

However, analysts have slammed the “phishing expedition”, saying the information gathered was liable to abuse by factional gladiators in Mugabe’s Zanu PF and that it potentially violated privacy rights, as guaranteed by section 57 of the Constitution.

“As you would know, this government has no tactics in raising money and so it resorts to rudimentary strategies like it employs at party level, and the tragedy is that this happening in a dollarised economy where capacity to influence monetary policies are limited,” said one exasperated business executive, adding the blitz could also see several people being imprisoned or heavily fined under trumped-up tax charges.

This, he said, arose from section 84 of the Income Tax Act, which called for heavy sanctions against people giving false or incorrect information.

“The right to control tax does not give the taxman the right to intrude individuals’ rights,” they said, adding if government had recently given organised business an amnesty it must do the same to the affected individuals. daily news

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