Zimra tells business to lobby for suitable tax laws
THE Zimbabwe Revenue Authority (Zimra) has urged taxpayers to continue lobbying for a preferred tax environment to improve the country’s business environment.
A recent tax dialogue organised by The Financial Gazette heard that business is reeling from the pressure of complying with Zimbabwe’s tax laws.
“Legislation does not belong to Zimra, but it belongs to you, the taxpayers,” Zimra’s head of technical services, Mathias Chinanayi, said at the event.
“So, whenever you hear that there is a budget process and there are things that you feel should be changed, do make an effort to make submissions to the government to have those changes implemented.
“Zimra does not have the mandate to make laws, its duty is to collect revenue according to the current laws.
“The onus remains on business to lobby for whatever changes you feel should be made to the laws,” Chinanayi said.
Speaking at the same event, Old Mutual Zimbabwe’s group finance manager and a member of the Institute of Chartered Accountants of Zimbabwe’s tax and other legislation committee, Lucia Chipungu, echoed Chinanayi’s sentiments: “Let us be part of the tax legislation process. Let us play our part… let’s get an understanding of the issues and not leave everything to our tax advisors,” she added.
This also comes as miners have said Zimbabwe’s high royalty fees are impacting negatively on the country’s quest to create a US$12 billion mining industry by the end of this year.
The country’s mining royalty charges, at up to 10 percent, are among the highest in the world.
Speaking at the annual tax review symposium, the chief economist of the Chamber of Mines, Pardon Chitsuro, said there was an urgent need to review the royalty structure.
The tax review get-together is organised in partnership with Zimra, the Zimbabwe Institute of Tax Accountants, and the Institute of Chartered Accountants of Zimbabwe.
Also speaking during the tax indaba, the chief executive of the Confederation of Zimbabwe Industries (CZI), Sekai Kuvarika, described the country’s business environment as “peculiar”.
“The peculiarity that we are experiencing is emanating from our currency situation. So, the dynamics of inflation, exchange rate management and the distortions that come with that have actually created all these problems.
“Let us resolve the distortions that are coming out of the exchange rate management and inflation environment that we are experiencing in the country. That is the major reform that we need,” she said.
Kuvarika further said business was of the view that resolving the country’s currency issue would put to bed a host of other teething issues that were negatively affecting industry and commerce.
“Zimra doesn’t want to lose value and what they have now done is that they assume that everything is in hard currency because of the current spread of US$ transactions in the economy.
“That assumption may not be correct because it is affected by a whole lot of other things. This is because Zimra can’t quantify or project the weight of the losses that business is exposed to in the Zim dollar component of their businesses.
“No matter how small, the Zim dollar component may be delivering huge losses to businesses and maybe the US$ component, big as it is, may not actually be delivering super profits for the businesses,” she added.
Kuvarika also said the key call from business was for the resolution of the distortions that had wracked the economy for a few years now.
“The tough environment is creating a situation for exceptions and exemptions and moratoriums, and I think one of the issues that have been mentioned is the issue of PAYE and exemptions from taxes for civil servants and not exactly for the rest of the employed communities in the country.
“If we find ourselves in a situation where we have to make one rule for one segment of the economy while excluding another, then we actually do have a challenge.
“All this can be traced back to the issue of exchange rates and distortions in our economy,” Kuvarika said further.
The dialogue focused on the socioeconomic, administrative, and legislative issues surrounding Zimbabwe’s tax regime, as well as how to improve synergies between business and government. The key issues examined were the changes implemented throughout 2022 and how they impacted businesses.