Business Development

Government policies haunting Zimra’s taxation system


By Anyway Yotamu and Joyce Mukucha

The Zimbabwe Revenue Authority (Zimra) is experiencing  challenges in its tax levying systems as a result of government policies including the
ongoing transition from the use of the multi-currency system to mono-currency.

As such, the revenue collector called on companies to bear with it during the time it battles to bring all the systems to order.

Zimra Commissioner General Faith Mazani revealed this on the 20th of February 2020 when she addressed this year’s edition of the annual tax review conference in Harare .

The challenges are largely emanating from the fact that there are some sectors, particularly those in tourism and mining that have been exempt from the exclusive use of the Zimbabwe dollar as part of Government efforts to boost production and receipts.

The change from a multi-currency system, which was largely anchored on the US dollar also means the tax collector has to change its tax levying systems, something which is yet to be done conclusively.

Ms Mazani also reiterated the authority’s earlier announcement that those who transact in foreign currency will have their taxes levied in their currency of trade including those that got the Reserve Bank of Zimbabwe’s permission to transact in foreign currency.

“With some sectors, like tourism and mining continuing to operate in foreign currency, doing returns and also processing these returns in dual and multi-currency has presented challenges for both taxpayers and the authority,” Ms Mazani told delegates at the tax conference.

“This has particularly been difficult as it requires systems to be changed. I therefore appeal for your patience as we adjust our systems and the Zimra team will be available to give any assistance that maybe necessary as we go through this transitional period.

“Taxpayers need to know, however, that the law still requires those conducting business in foreign currency to report their tax affairs in foreign currency, even if they are doing it illegally,” she said.

In buttressing the point Finance and Economic Development Deputy Minister Clemence Chiduwa said de-dollarisation is not an event but a process that is bound to be accompanied by such problems as the ones affecting Zimra.

“I am aware that many of us in this room may have a lot of concerns over tax policy and administration of issues particularly as we transition from the multi-currency system to the mono-currency regime,” said the deputy minister.

“We have been discussing this issue with the CG (Ms Mazani), that given that our process of de-dollarisation is not as smooth as we expected, it is going to have ramifications in terms of the efficiency with which we are going to collect revenues,” he said.

Deputy Minister Chiduwa said boosting tax collection is particularly important to Government as it seeks to arrest the budget deficit and the new dispensation has targeted to reform the tax system with a view to improving revenue collection and supporting the growth of industry.

He also added that while Government is conscious of the need to ensure the need to design a tax compliance system that will not discourage tax payers from participating, it was not possible given that the country’s tax systems will not meet the expectations of every business

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Byron Adonis Mutingwende