Local diamond beneficiation sector struggle to operate

Kenneth Matimaire

MUTARE
– Industries and commerce expressed strong reservations against the conduct of
the Zimbabwe Revenue Authority (Zimra), accusing the tax collector of squeezing
companies out of business, Radio VOP can report.

Manufacturing
companies and government entities said its time the government tax collector
reforms under the new dispensation.

The
call came at a time President Emmerson Mnangagwa promised to attract foreign
direct investment in a bid to resuscitate industry and employment creation.

However,
industrialists warned that the process also require reforms of the taxing
system as the tax collector is said to be “fighting capital.”

“In
UK (United Kingdom) their tax collector which is HMRC (Her Majesty Revenue and
Customs) does not fight capital. They call capital with a cup of tea and tell
them we will keep probing your offices as long as you have businesses. But Zimra
fights capital everyday in Zimbabwe. Business is being fought by Zimra everyday
being hit with 100 percent tax penalties. There is nowhere in the world where a
tax authority hits a tax payer with a 100 percent penalty. This is a culture we
have to change,” said Tanganda Tea Company finance director Henry Nemaire.

Nemaire
– former vice president of the Confederation of Zimbabwe Industry (CZI) – advised
that reforms taxing reforms were paramount for industrialisation to take off.

Leading
beverages manufacturer in the eastern region, Mutare Bottling Company (MBC)
also raised similar concerns.

MBC
managing director Allen Lang said “Zimra needs to change the way it
handles tax issues.”

The
bottling company was, this year, embroiled in a tax wrangle with Zimra.

“We
have been going to Zimra and every time they have been raising new issues. They
are saying they have issues that are coming from 2013 and 2014 where certain
credits you (MBC) paid were disallowed but that was not communicated to us.
Because in those years we actually received our tax clearance certificate
including this past year. But now they say we need to pay a balance of $256,000
and they say it’s for late payment balances,” said MBC finance manager
David Kanengoni.

A
company cannot receive payments from clients without the tax clearance.

Any
company that trades without a tax clearance will be subjected to a 10 percent
withholding tax, an option Lang said MBC “can’t afford in such trying
times.”

Local
authorities have not been spared from the melee as they appealed to government
to order Zimra to stop garnishing its accounts.

Zimra
has been grappling with a shrinking revenue base following the collapse of the
country’s industrial sector, forcing the tax collector to tighten its screws
and further squeeze the few remaining companies and tax payers.