Econet dismisses tax evasion allegations

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ECONET Wireless has dismissed allegations that the company has evaded paying duty taxes since 1998 saying the accusations by a whistle-blower were false and defamatory.
The telecoms giant is facing allegations of tax evasion by paying less duty on base stations than they were supposed to since 1998.
In a statement, Econet said the allegations were false and had no substance.
“The allegations are extortionate and calculated to demonise Econet and cause friction between Econet and officials of Zimra who will now be scared of treating Econet properly as a major client for fear of being accused of colluding with Econet,” said Econet.
“Econet has instituted proceedings for the recovery of its money from the so-called whistle-blower. For the record, we wish to state that Econet is a good corporate citizen that does not avoid its tax obligations.
“Since dollarisation, Econet has paid the following: Income Tax, Value Added Tax, Import Duties and Licence Fees respectively, a fact that contradicts the false allegations published against it.”
The whistle-blower is said to be Econet’s clearing company agent for more than 10 years.
“Econet paid him duties and taxes that he failed to transmit to Zimra, but instead converted to his own use,” the company said.
“When we demanded payment of the money, he alleged that he was involved in malpractices in collusion with some Econet employees and threatened to expose the malpractices if Econet did not pay him.
“Because the allegations he made were serious, we immediately reported the matter to Zimra and law enforcement agents through meetings our chief executive officer, Douglas Mboweni, held with the authorities.
“We confirmed our report to Zimra in writing and invited them to conduct their own investigations while we also instituted our own investigations into the allegations.”
Econet said according to their investigations since 1998, base stations were cleared by Zimra officials at different ports of entry under a duty-free tariff.
The classification of the base station components imported under a duty-free tariff was communicated to Econet in writing, and the classification was followed over a 10-year period from the time when the Department of Customs and Excise fell under a separate Director of Customs and Excise, who is not the current commissioner general of Zimra.Advertisement

However, Econet said garnishee orders that had been placed on Econet’s bank accounts over this matter for a capital amount of US$15 884 943 plus a 300% penalty was lifted by an order of the High Court.