Zimra urged not to fight capital

Published: 14 February 2018

Government has been urged to desist from the culture of imposing punitive penalties on businesses that fail to honour their tax obligations to encourage increased production and curb the closure of local business.

Tanganda Tea Company finance director Mr Henry Nemaire last week said the Zimbabwe Revenue Authority (Zimra) had to adopt a more pro-business approach to revenue collection.

"Poor countries fight capital, they fight business. Business is being fought by Zimra on a daily basis. There is nowhere in the world where a tax authority hits a taxpayer with 100 percent penalty on the first instance of default. So, it's a culture we have to change," he said.

"We need to change the way Zimra operates so that they are not trigger-happy. They should not rush to put 100 percent penalty on defaulting taxpayers but instead, they should use their discretion to listen to business and put a reasonable penalty on each case. Whatever they do, they should ensure that the business will be able to move on after they are done with it."

He said the amount of investment flowing into the country was likely to increase and Zimra should be poised to employ revenue collection measures that did not disadvantage investors. Mr Nemaire cited several tax authorities in Southern Africa that had come up with pro-business measures and had been able to efficiently collect taxes on government's behalf.

"The culture in other countries is a culture of supporting business. Because it is business that will develop exports, it is business that will grow exports. So if you fight capital you are making the country poorer. All that has to change if we are going to attract investors," he said.
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