Crisis Coalition evades tax

THE Crisis in Zimbabwe Coalition (CiZC), which is the secretariat of a grouping of 82 non-governmental organisations working to tackle the crisis in Zimbabwe, did not pay its taxes in 2012 going into 2013, an audit report has revealed. An audit by chartered accountants, Baker Tilly Gwatidzo, found that in the period ending December 31, 2013, CiZC evaded taxes resulting in the organisation incurring some penalty charges to the tune of US$22 346.

But tax was not the only statutory payments the organisation evaded. CiZC also did not remit pension payments during the same period, the audit noted. “We noted that National Social Security Association (NSSA) pension and Pay As You Earn (PAYE) payments were not remitted at all for much of the year. Our tests detected that only one payment was made in May 2013,” Baker Tilly Gwatidzo noted in their report.

“Due to late payment of PAYE, Crisis in Zimbabwe Coalition suffered penalty of US$22,346,” the report continued, before making a recommendation that NSSA and PAYE payments be remitted by the 10th of the following month.
In response, the organisation said it had “approached all relevant authorities, and outstanding matters were resolved amicably.”

CiZC director, Macdonald Lewanika, told the Financial Gazette that his organisation failed to honour statutory obligations because of financial challenges the organisation faced in that particular period. “We did not hide from the Zimbabwe Revenue Authority (ZIMRA). There was nothing underhanded about it. We were unable to pay at that time because our financial inflows were low during that period. We did not get as much from our donors as we normally did and also some disbursements came late,” Lewanika said.

He added, “We have since worked out an arrangement with ZIMRA and we will be able to amicably resolve this because our finances are more stable this year.” The same audit report also noted that the organisation had also failed to comply with donor requirements by not submitting to USAID value added tax remittances.

“This could lead to disputes, resulting in withdrawal of funding,” Baker Tilly Gwatidzo pointed out in the report. Although it could not be established from USAID what their reaction if any was regarding this, Lewanika, who acknowledged the need for the organisation to abide by the donor set rules and regulations, told the Financial Gazette that so far there had not been a backlash yet and that the organisation was working hard to ensure compliance with all requirements as an ongoing process.

USAID is one of the major CiZC donors. Although the audit did not find any explicit fraud or misappropriation of funds, it in general noted that there were a number of control weaknesses which required attention at CiZC.  Baker Tilly Gwatidzo recommended effective solutions in countering the control deficiencies within the organisation.

Meanwhile Lewanika’s contract is set to expire at the end of this month. This comes at a time after the former chairperson CiZC, Dewa Mavhinga, had earlier written communication that Lewanika’s contract be terminated following stormy misunderstandings that reeked of power tussles with underlying personal vendettas between the two.  The stormy period saw 10 Bulawayo member organisations pulling out of coalition with the threats of more leaving over concerns of non consultation, inadequate representation, among other complaints.

Mavhinga’s intended termination of Lewanika on grounds of bad management, was later overridden in developments which saw the chairperson himself opting out in a resignation at a members’ meeting in November leaving Lewanika to work through his contract.  With the end date of the contract drawing closer it is not clear yet whether or not it will be renewed.

Lewanika told the Financial Gazette that he would wait upon the board to decide his fate. “I will wait to hear from the board,” he said, before adding, “I am not bent on staying here forever but I do not want to be chased like a thief. I would like a chance to clear my name and navigate the organisation well out of the storm.”

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