Zimra, RBZ appeal for forex tax payment

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The Herald

The Zimbabwe Revenue Authority  (Zimra) and the Reserve Bank of Zimbabwe (RBZ) yesterday warned  businesses transacting in foreign currency but not remitting taxes  in forex that they face heavy censure if caught.

The two institutions issued a joint appeal for voluntary compliance  with tax laws.

This comes amid indications that some businesses were charging foreign currency for goods and services but were recording the sales in local dollars.

Zimbabwe, which for over a year had officially been using a  mono-currency for trading, in June this year allowed businesses to  dually price their goods and services in local currency and in foreign  currency, primarily the United States dollar.

Since then, RBZ Governor Dr John Mangudya said there has been a 50-50  usage of the local currency and the greenback in the number of  businesses transactions recorded.

There are cases were some proprietors were declining local dollars.

But oddly, this has not been the same in terms of tax compliance with  some businesses cheating Government but either total failure to declare  transactions conducted in foreign currency or under-declaring for tax  purposes.

Businesses are required to split their tax payments in both local  currency and foreign currency depending on which currency was used for  transacting.

Zimra Commissioner General Faith Mazanhi said it had been established  that businesses had devised schemes to conceal transactions conducted in  foreign currency to avoid paying tax using the same.

“Where a sale is recorded in Zimbabwean dollars, the invoices, till  slips and receipts recording the sale must be issued in Zimbabwean  dollars,” she said while addressing a joint Zimra and RBZ virtual press  conference..

“Where a sale is made in foreign currency, the invoices, till slips and  receipts recording the sale must be issued in foreign currency,” she  added.

“Where a sale is made in parts of Zimbabwean dollars and foreign  currency, the invoices, till slips and receipts must reflect such  currency details.”

The tax authority established that to avoid paying tax in foreign  currency, some businesses were allegedly not recording transactions  being tendered for in foreign currency while where transactions had been  recorded, part of the foreign currency was not being declared for  tax purposes.

Some were reportedly writing transactions done in foreign currency  manually instead of recording them electronically to avoid being traced  while others were receiving foreign currency from their customers but  issuing them Zimbabwe dollar receipts.

On the other hand the hard cash being received in payments was not  being banked.

“There are stand alone tills which are not configured to the Zimra fiscalisation system and some traders have created back offices and  banking halls where foreign currency payments are being received but not  being receipted or declared on returns,” Ms Mazanhi said, adding all such  practices were a direct violation of the law.

“Tax audits on payments in foreign currency are currently on-going and  any detected non-compliance will be sanctioned as provided in the law,” she said.

“The sanctions include penalty charges and interest, prosecution,  naming and shaming non-compliant sectors or businesses.”

Ms  Mazanhi encouraged the public to report businesses practising such  behaviour through a whistle-blower facility the tax authority runs while  Dr Mangudya said the central bank was also establishing a toll free line  for the public to report such crimes.

Dr Mangudya said while deposits in local foreign currency accounts were  going up, this was not the same in terms of tax payments to  Zimra.

“We have seen an increase in domestic foreign currency accounts  deposits but we are not seeing the same increase in the revenue being  collected by Zimra. We also know that some of the businesses are not  even banking the cash that they are getting,” he said.

Dr Mangudya even went Biblical in exhorting businesses to pay their dues.

“Even Jesus said you must give Caesar what belongs to Caesar,” he said,  adding that paying tax aided national development as the government would  get more funding for its programmes. — NewZiana/Finance & Business.

 

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