Finance Minister Patrick Chinamasa informed local authorities and businesses that are in tax arrears while at the same time being owed by government and its departments can approach his ministry and negotiate for converting the government debt into tax credits with the Zimbabwe Revenue Authority (ZIMRA). This comes after ZIMRA had been refusing to accept any government debt-tax swap agreements since 2014 as taxes collected by the authority started plummeting after the collapse of the Government of National Unity in mid 2013. The move by Honorable Chinamasa to reinstate the government debt-tax swap is certainly a welcome development to business and industry as a whole.

Speaking at the Zimbabwe Building Contractors Association AGM held at Montclair Hotel last week, Minster Chinamasa said: “…We have been allowing swapping out of debt but only past debts, not future debts. If you can come with a clear case where you are owing ZIMRA in taxes and a government department, like the army or the police is owing you and you give us clear specifications of that relationship, we will try to help.” The Minister, however added: “I have no power to give anyone an exemption and I don’t like that power…” making reference to businesses who appeal to his office when they have had an impasse with the tax authority over arrears.

It is a public secret that the government has been financing its budgetary deficit through delaying payments to private sector for goods and services supplied to the government and its departments. This has resulted in the government owing many local and foreign business but its bloodhound ZIMRA does not take that into consideration when hunting for money for the fiscus. The continued target misses and declining revenues at ZIMRA have seen its officers adopt an aggressive mode when dealing with taxpayers including levying 100% penalties and interests on minuscule offences such as failure to submit returns on time despite the payment having been done timely and being penalised for delaying payment by a couple of days. This is especially frustrating businesses who are at the same time owed money by government as they see it as the government is biting the hand that feeds itself.