ZIMRA suspends whistle-blower facility

THE whistle-blowers’ fund introduced by the Zimbabwe Revenue Authority (ZIMRA) as part of efforts to reduce rampant corruption in the public and private sectors has been suspended, the Financial Gazette has learnt. Zimbabwe adopted comprehensive whistle-blower laws for tax purposes in 2001, and this is enshrined in the ZIMRA Act (Chapter 23:11) under Section 34B.

ZIMRA’s director of legal and corporate services, Florence Jambwa, confirmed the suspension last week saying it covers the duration of an amnesty for defaults on tax obligations accrued between February 2009 and September last year. The amnesty, which ZIMRA hopes will improve financial disclosures and widen revenue inflows, became effective on October 1, 2014. It will expire on March 31 this year, giving an opportunity for defaulters to regularise their tax affairs.

The amnesty programme relates to interest and penalties on unpaid taxes. Covered taxes comprise any tax or duty administered by ZIMRA and includes income tax, capital gains tax, customs and excise duties, value added tax and stamp duties.

“The whistle-blower facility was put in place for purposes of recovering lost revenue by unscrupulous and uncooperative companies or individuals,” said Jambwa.

“The facility is open to members of the public, except ZIMRA officers, to come forward to ZIMRA with tangible information which enables the authority to recover revenue which otherwise would have been lost had the whistle-blower not come forward.

“This facility is designed to augment the authority’s other strategies to recover lost revenue such as investigations, post clearance and taxes audits which are carried out to retrieve undeclared or undisclosed taxable incomes. It must be noted that currently, the whistle blower facility is under suspension for the duration of the amnesty which runs from 1 October 2014 to 31 March 2015.  This means ZIMRA is not receiving information on new cases until the suspension period has expired.”

She said ZIMRA had a policy of zero tolerance on corruption and the authority was always more than willing to receive any evidence which could bring corrupt culprits to book. The whistle-blower law is meant to promote an open culture with the highest standards of honesty and accountability where citizens can report any legitimate concerns in confidence.

In section 34B, subsection 2, the commissioner-general may, with the approval of the Finance Minister, award any person, not being an employee of the authority, or a near relative of an employee of the authority, a monetary reward for information provided or any measure taken which results in detection of smuggling or any illegal and underhand activities, and of the recovery of revenue which would otherwise have been lost.

The Act rewards whistle-blowers who tip-off with 10 percent of the total tax revenue and penalties recovered as a result of whistle blowing information provided. Under the amnesty programme, companies and individuals are now required to disclose all tax irregularities relating to covered taxes. To be eligible for the amnesty, companies and individuals should not be currently under audit or investigation.

The underperformance of the economy has seen individuals and firms defaulting on their tax obligations, resulting in shrinking State revenue. ZIMRA announced that revenue collections for the third quarter of the year 2014 fell nine percent to $884,5 million after most revenue heads underperformed.

Last year, this newspaper reported that the whistle-blower facility was being abused by the tax agency’s officials.
The damning revelations, which the authority could neither deny nor confirm, put ZIMRA in an invidious position as it had been at the forefront of fighting graft, which is destroying Zimbabwe’s social fabric.