I have concluded that those at the helm at Zimbabwe Revenue Authority (ZIMRA) have lost their bearings. I now solidly believe that the rank and file at ZIMRA are doing a sterling job but they are being led by a board that has no idea of handling clients that are in intensive care. Maybe the issue is that they are too caught up with meeting their targets at all costs without weighing the long term effects of their actions. This year alone it has been estimated that over 229 companies closed in the first half of the year.
Recently ZIMRA were on the prowl again, as has come to be the order of the day. In sign of desperation; ZIMRA renegaded on a standing arrangement with the National Pharmaceutical Company (NatPharm) which owes ZIMRA over US$269,000 in tax arrears. The tax authority had a standing off-set agreement as NatPharm is owed US$25million by the Ministry of Health and Child Care. It’s mind boggling that ZIMRA cannot read between the lines, if Natpharm is owed a staggering US$25 million by the government, how are they surviving in terms of working capital, operational expenses and inventory levels.
Other than the fact that NatPharm is a sensitive company and the fact that there are drug shortages nationwide, garnishing their account would have further compounded the drug shortages in major referral hospitals and other public health institutions. If the garnishee order had been actioned it would have derailed NatPharms strategy of engaging pharmaceutical companies in Zimbabwe to produce specific drugs through a tolling arrangement.
It is saddening that ZIMRA garnishes at least 100 companies monthly. The tax authority is explicitly discouraging businesses from transacting with the government. The government takes more than 180 days to pay its arrears, which various private enterprises incur penalties and interest from failure to remit taxes on time. At least if ZIMRA would give tax breaks or holidays to companies that deal with government regularly and devise a system of penalising businesses that are paid on time via blue chip private sector companies, but remit taxes late or don’t remit at all.