Taxable entities that delay their tax remittances face
stiffer penalties after Finance and Economic Development Minister Mthuli Ncube
hiked interest on outstanding debts by 400 percent. Interest on outstanding
debts has been 5 percent, but has now gone up to 25 percent.
Presenting the 2019 Mid-Year Fiscal Policy Review Statement
and $10,85 billion Supplementary Budget on Thursday, Prof Ncube said
non-compliance with tax legislation continued to deprive Government of revenue
to support critical issues such as infrastructure and social services.
This comes as Government is looking to realise tax revenue
of $12,748 billion to fund an array of key public programmes, including the
civil service wage bill, infrastructure projects, health, education and
agriculture.
“A number of taxpayers deliberately delay remittance of tax
to Government in order to fund their operations,” said Prof Ncube said during
the presentation in the House of Assembly attended by President Mnangagwa.
“In order to discourage taxpayers from such practices, I
propose to review the interest rate paid on outstanding debts from the current
5 percent plus Libor (London Interbank Offer Rate), to 25 percent.”
The Zimbabwe Revenue Authority (Zimra) is owed $4,5 billion
in tax arrears by companies, some of them owned by top politicians and
respected businesspeople.
Of the outstanding amount, about $2 billion of this (50
percent) is the principal debt, while $1 billion (23 percent) is in interest,
with the remaining $1,1 billion (27 percent) being penalties. Herald
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