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Zimra Considers Tough Tax Penalties. The Zimbabwe Revenue Authority (Zimra) is exploring the implementation of strict tax penalties aimed at pressuring both public and private entities to settle large amounts of overdue tax liabilities.
These outstanding debts largely arise from companies’ incorrect tax evaluations, with domestic tax debts reaching ZiG348.33 million and US$308.03 million, and trade-related taxes amounting to ZiG506.39 million and US$113.37 million.
According to Zimra Chairman Anthony Mandiwanza, a significant portion (80%) of these debts has emerged due to new tax assessments conducted through audits and investigations, while the remaining 20% represents debt that has not yet been collected.
Zimbabwe to Allow Tax Payments in New ZiG Currency to Strengthen Local Economy
Zimra Considers Tough Tax Penalties: Proposed Measures
To address this issue, Zimra is considering several strategies, including a proposal to adjust the interest rate on overdue taxes. The proposal recommends setting the interest rate at the bank policy rate (BPR) plus an additional 5%, which is expected to encourage quicker payment of taxes.
Economist Dr. Prosper Chitambara supports this initiative, arguing that higher interest rates could effectively discourage tax evasion.
However, some business experts, such as economist Mr. Tinevimbo Shava, express concerns that while the measure may enhance compliance, it could also place financial pressure on companies that are already struggling.
Despite the challenges, Zimra reported a strong revenue performance in the first half of 2024, with net revenue reaching ZiG36.06 billion, exceeding the target of ZiG35.39 billion.
This positive outcome is credited to various efforts in key tax areas and the introduction of the new currency, ZiG, which has contributed to stabilizing the economic environment.
Zimra remains focused on reducing the overall debt burden and ensuring greater tax compliance through proposed measures like the interest rate adjustment.
The overarching goal is to cultivate a culture of tax compliance that will benefit the nation as a whole.
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