THE country’s tax collection chief has said although the government is keen to repair the damage caused by 15 years of deindustrialisation and investment outflows it would not go soft on tax penalties charged to multinational companies.
Calling for more dialogue with global enterprises to understand the nature of their businesses, Zimbabwe Revenue Authority (ZIMRA) commissioner-general Gershom Pasi took issue with Botswana’s “soft” tax penalty rates of 1.5% to 12% on Monday at the Ernst & Young Africa Tax Conference in Johanessburg.
In Zimbabwe, he said, the penalty for a first tax offence is a maximum rate of 100% and then a maximum rate of 200% for subsequent offences.
“Penalties must serve a purpose. They should not be affordable and soft, else they cease to be penalties,” said Pasi.
“We experienced 15 years or so of de industrialisation and dis investment and are seeking to turn that around. It led to informality, which is becoming more of a problem.”
The ZIMRA chief said while many multinationals still use “unpalatable practices” in their tax affairs, more dialogue with these firms was needed.Advertisement