17 June 2014

Zimbabwe: Zimra Hunts Banks Foreign Cash Piles

IN a move that is likely to send jitters across the financial services sector the Zimbabwe Revenue Authority (Zimra) has indicated that it is scouring the globe for "nostro accounts" held by local banks.

Zimra commissioner general Gershem Pasi told journalists in Harare Monday on the side-lines of a one-day Workshop on parastatals that discussions with fiscal and monetary authorities were at an advanced stage.

"There's is dialogue. As you know we have a new (RBZ) governor and we are talking between him, ourselves and the Ministry of Finance," Pasi said.

In the early part of the last decade, a government crackdown saw numerous bank proprietors accused of externalising foreign currency flee the country in what critics in what was seen as a political witch-hunt targeting supposed opposition supporters.

"All we are saying is if that there's money made in Zimbabwe and its seating in an account somewhere and it's not earning any interest," said Pasi.

"We should deem it to be earning interest so that we start taxing that amount or that amount should be brought back so that it can help in the banking sector. Business can access those funds.

"It's not an issue which can be done by one person or by one division hence we are working together with the new governor and treasury but we are hopeful something will be done in due course."

Pasi also said tax irregularities have been detected during audits of state enterprises adding there was need to correct the situation.

"Some of the issues picked up by the audits include benefits not being taxed, which people look at them as being in-kind," he said.

"But even in-kind benefits should be quantified by accountants, they put a money value and then deduct the PAYE and that was not happening in some instances.

"Sometimes there are cases where PAYE has been deducted but not paid over either due to some lapses in the accounting systems or in a few cases blatant non-compliance."

Zimra commissioner in charge of Customs and Excise Duty, Happias Kuzvinzwa, said the country was losing millions of dollars because its exit and entry points were porous.

Goods in high demand as well as people were allegedly being smuggled through designated and undesignated points dotted along the country's frontiers with neighbouring countries.

"Goods in high demand, such as clothing, shoes, blankets, cooking oil, soap and general groceries for imports and cigarettes for export are often smuggled through these undesignated entry or crossing points," he said.

Zimbabwe has only 15 legal crossing points but the Zimra official said there were some 32 known illegal points used by syndicates as exit and entry points into the country.

He said government was now looking at opening new border points at Mambapele (Matabeleland South), Cashel valley (Manicaland), Chinake (Mashonaland East) and Binga (Matabeleland North) adding efforts are underway to refurbish and upgrade infrastructure at border posts for they are no longer adequate for operations.

"The current infrastructure at most of our border posts were constructed many years back and is now no longer adequate for the volumes of traffic utilizing such facilities," said Kuzvinzwa.

"Infrastructure upgrade is required at all border posts priority given to Kariba, Beitbridge, Forbes, Nyamapanda, Kazungula and Victoria Falls."


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