150 companies deregistered

150 companies deregistered
Published: 14 April 2014
More than 150 companies have been struck off the register, while over 200 have three months to prove their existence or be dissolved as the economy continues to slide under a biting liquidity crunch.

In the Government Gazette published last Friday, the registrar of companies announced the dissolution of more than 150 companies, while some of them have been placed under liquidation.

"Section 320(1) gives all rights to the registrar to remove a company from the register where there are reasonable grounds to believe that the company is not carrying business or is not in operation," read the Government Gazette.

It could not be immediately ascertained how many workers would lose jobs as a result of the move to deregister the companies. Thousands of workers have lost jobs in the past six months due to retrenchments and company closures.

The deregistering of companies, according to economic experts, has resulted in the shrinkage of the country's tax base as well as contributing to the growing unemployment.

Financial expert Joseph Sagwati said the dissolution of the companies would contribute to the dwindling of government revenue base which has an impact on social service delivery as well as its ability to pay civil servants.

"This will definitely have an impact on the revenue base of the taxman. It has an impact as well on employment with more people being thrown onto the streets. Before a company is struck off, the registrar must be satisfied  the company  was now dormant  so the taxman would not  lose out on pay-as-you-earn and corporate tax on those companies," Sagwati said.

A number of entities across the country were teetering on the brink of collapse and are struggling to meet their salary obligations or even to stay afloat. Local authorities, among them Harare City Council, were struggling to pay salaries and their employees rarely know their pay days which have since become unpredictable.

"Government must assist these small companies so as to grow the small to medium enterprises sector which is currently the economic engine of the country," Sangwati said.

The lowest capital base for the companies struck off by the registrar had an asset base of $3 000, while the highest had $20 000.

Last week, Zimbabwe Revenue Authority (Zimra) boss Gershem Pasi told a parliamentary portfolio committee that the country should brace for more hardships as the economy continues to bite.

"We are headed for serious shrinkage of revenue unless something is done soon to increase revenue in the country," Pasi said.

He said this as he revealed that the country's revenue collector had surpassed its income targets by a 2% margin.

"It's a miracle that we have surpassed our first quarter target… considering the current state of the economy. Things are not well out there," he said, adding that government must urgently act to stimulate local production.

Last year, Zimra collected a total revenue of $3,4 billion, 6% short of the  $3,6 bn target. Government registered a budget deficit of $16,8 million in February compared to a surplus of $17,8m in January as revenue collections declined, further reflecting the economic slow down.

Some of the companies struck off  the registrar include Tobacco Development Company of Africa, Papri- Spice, Goldridge School, Combined Tobacco Buyers of Zimbabwe, Ennion Investments, Agriterra Zimbabwe, Redlands Development Company, A R Gold, Sal-tronics, World House Investments, Chalford Investments, Signita Investments, Rinland Ranching, Haiyifa Logistics Zimbabwe, Foseco Zimbabwe and Select Seeds of Zimbabwe.

Last year, many struggling companies across Zimbabwe did not pay a 13th cheque to their workers in the face of working capital challenges and escalating losses.

Dozens of underperforming companies have applied for permission to retrench while others approached the courts for liquidation.

According to Zimbabwe Congress of Trade Unions, more 300 workers are retrenched each week due to viability challenges.
- Zim Mail
Tags: Companies, Zimra,


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