The Zimbabwe Revenue Authority (ZIMRA) has reportedly lost tax records dating back to six years ago, raising concerns over potential revenue leakages and tax evasion. It is speculated that the records may have been lost due to a server crash or a lack of a reliable backup system.
ZIMRA has requested its clients to resubmit their Pay as You Earn (PAYE) P2 forms, Value Added Tax (VAT), and Income Tax (ITC) records stretching to 2017, citing them as “outstanding”, although some clients claim to have already submitted the records.
Zimbabwe heavily relies on taxation to fund the fiscus, with taxes contributing 97.6% to government revenue in 2022.
NewsHub’s Sofia Mapuranga reports that ZIMRA’s head of communications, Gladman Njanji, did not respond to questions. Another official in the same department, Francis Chimhanda, requested the questions in writing but did not respond despite repeated reminders.
Economist Prosper Chitambara allayed fears over the possibility of financial losses due to the systems crash, stating that many companies are likely up to date with their tax records, so the impact on the state would not be significant.
The loss of tax records has raised concerns that current tax evaders may take advantage, resulting in significant revenue leaks. Zimra has admitted that tax evasion is limiting its revenue collection efforts. In 2021, Global Financial Integrity reported that Zimbabwe lost US$1 billion through under-invoicing in the past decade. The Zimra commissioner general, Regina Chinamasa, has also acknowledged that fraudulent conduct has resulted in the state being prejudiced of taxes and levies.
A consultant handling the financial services of over five companies has expressed concern over the risk of firms indicating arbitrary figures to satisfy compliance, potentially prejudicing the state. Tax-related corruption, such as direct tax evasion and under-declaration, is common in Zimbabwe.
Source Pindula News
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