The Herald (Harare) Published by the government of Zimbabwe

Zimbabwe: Bring Tax Evaders to Book

editorial

Harare — THE main source of Zimbabwe's revenue has traditionally been income tax but customs duties now also occupy a critical role in the revenue structures of the economy.

This is particularly so where the country's informal sector has grown by leaps and bounds over the past decade, while the formal sector has shrunk and is not large enough to warrant adequate revenue of direct taxes.

Indeed, informal trade has significantly expanded, thus becoming a niche sector of our economy, which the Government can no longer afford to ignore for the purposes of revenue mobilisation.

However, the biggest challenge has been, and continues to be evasion of customs duties by importers. This is an activity, which has cost the Government a lot of dollars in lost revenue each year.

For the Government, income taxes -- which are indirect taxes -- are much easier to collect and Government control over taxpayers is far greater.

But it is too difficult to effectively put the vast informal sector and the many unregistered small businesses that have sprouted up at every corner of our cities and towns into the tax net.

It is therefore understandable why Zimra has launched a blitz on customs tax evaders, many of whom have become habituated to this social vice, which can only benefit individuals instead of the society in its entirety.

The blitz has so far been directed to the hub of informal traders at Mupedzanhamo near the Mbare Market and the Gulf market in downtown Harare.

This is where one can easily find most imported goods such as blankets, electrical gadgets -- DVDs, television sets and radios priced quite cheaply.

Most of the goods would have been either smuggled into the country or evaded customs duties through collusion between some corrupt customs officers and importers.

Smuggling is resorted to for total evasion of customs duties, since goods are not routed through authorised customs ports, while importers may only pay paltry duty by under-invoicing and misdeclaration of quantity and product description.

The State is in dire need of revenue to finance both capital and recurrent expenditure, which covers civil servants' salaries.

Any taxes lost through evasion will negatively affect promotion of savings, poverty alleviation, employment and maintenance of price stability, among other things.

It is important for all of us to realise that we are obliged to pay taxes and that tax evasion is a crime, which subjects the guilty party to fines and/or imprisonment.

Rampant customs evasion had fostered an environment in which many people have been attracted to this immoral activity.

We believe it is time we must lend our full support to Zimra for stepping up its operations and responsibilities to protect State revenue and ensure compliance with Customs laws.

And where there is transgression of such laws, goods should be seized and perpetrators investigated and prosecuted without fear or favour.


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