Pay up! Govt warns defaulters as tax agency owed $4.5bln

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By Anna Chibamu

TAX defaulters must pay up or risk stringent measures, the government has warned as it emerged that the Zimbabwe Revenue Authority (ZIMRA) is owed more than $4.5 Billion.

Finance ministry permanent secretary George Guvamatanga said those owing ZIMRA should approach the tax collector and make arrangements to pay up.

He was speaking during the presentation of bids by governments departments ahead of the 2019 budget.

“Government is owed over $4.5 billion of unpaid taxes. The issue of compliance is still a challenge. This figure is too high,” he said.

“We are working on very stringent measures and much tighter collation mechanisms.

“It will be important for those who are owing to approach ZIMRA and make arrangements to pay what is owed to government before the measures are put into place.”

He continued; “In other countries, you collect Value Added Tax (VAT) and income tax as an agent of government.

“After some time, you are supposed to hand over the money to government and, if you do not do so, it is theft. Elsewhere, it is a federal crime.

“When we start demanding government’s money; there is always talk that we want to close businesses. But we are only trying to demand government’s money.”

The treasury chief defended the recently introduced tax on electronic transfers saying the country’s economy had become informalized and there was need for the tax regime to respond to that shift.

“It is important to also accept that the structure of this economy had significantly shifted,” he said.

“It has largely gone into an informal sector. There was no opportunity for those in this sector to also directly contribute to government revenues.”

He said the recent “painful” fiscal interventions were necessary as restructuring the economy requires resources.