ZIMRA AGGRESSIVE AUDITS COSTING US : BUSINESS

The Zimbabwe National Chamber of Commerce (ZNCC) has warned that tax authorities’ aggressive audits are increasing cost pressures on businesses, which could discourage compliant taxpayers.

The Zimbabwe Revenue Authority (Zimra) has ramped up enforcement efforts through new digital platforms, including the Tax and Revenue Management System (TaRMS) and the Fiscalisation Data Management System (FDMS), triggering a surge in sector-wide audits.

As a result, many firms are facing steep additional tax assessments, exacerbating financial strain and threatening business viability. Delta Corporation Limited was hit with a US$74,8 million tax bill, while Innscor Africa Limited received an assessment of US$13,21 million owing to currency-related tax assessments.

“We need to strike a balance, especially considering Zimra’s aggressive tax collection approach. In an economy that has become highly informal, tax authorities become more aggressive because it is harder to collect revenue,” ZNCC chief executive officer Christopher Mugaga told businessdigest.

“We need a respectful approach. The current frequency of tax audits — companies being audited three or four times in just two or three months — is not acceptable. At the same time, there has also been a lack of proper tax planning. Some companies are evading or avoiding tax, which ultimately affects revenue collection, especially in Zimbabwe.”

Policy analyst Simbarashe Mambara said TaRMS and FDMS were designed for efficiency, but in practice, they are producing audit alerts at an overwhelming rate.

The result is even minor filing errors such as currency code mismatches or timing issues can escalate into full audits.

“During the early phase of any new system, risk filters tend to be overly cautious. That is exactly what we are seeing here,” Mambara said.

He noted that Zimra’s intensified audit regime was also being driven by revenue pressure, as Treasury seeks to meet growing fiscal obligations.

“Industries such as telecoms, mining services, and large-format retail tend to have complex cash flows and significant forex exposure. These complexities trigger more flags under automated systems," Mambara said.

“A firm might undergo a Value-Added Tax desk review in January, a corporate tax field audit in February, and a Pay-As-You-Earn check in March,” Mambara said, adding that these were separate audits under different units, but the business experiences them as a “single, relentless process."

In other instances, companies have faced repeated audits on the same tax head, often triggered by new data or unresolved issues from a previous engagement.

Mambara recommended Zimra recalibrates risk filters, raise trigger thresholds as data quality improves, and integrate audits across tax heads to avoid duplication.

Zimra, however, defended its exercise, saying it was empowered to conduct audits through various legislations.

“Taxpayers have the following obligations: determination of tax, completion of returns, remittance of tax on prescribed dates, proper record keeping, accessibility of records, and liaison with Zimra. Failure to adhere to these obligations may render the taxpayer liable for a tax audit," it said.

“Therefore, audits cannot be limited to a specific number over a specific period of time, as there are various triggers.” Zimbabwe Independent

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