22 September 2017

Zimbabwe: 'Zimra Slept On the Job On Fiscalisation'

The Zimbabwe Revenue Authority (Zimra) says it did not go full throttle on the implementation of the fiscalisation programme when it was introduced seven years ago.

The programme was meant to minimise revenue leakages in retail sales. The fiscalisation programme was introduced in 2010 in terms of the Value Added Tax (Fiscalised Recording of Taxable Transactions) Regulations, 2010 under Statutory Instrument 104 of 2010 to ensure that all VAT registered operators acquire, install and connect the fiscal gadgets to the Zimra server to facilitate real-time monitoring of transactions, have indeed boosted the programme.

Zimra chairperson Willia Bonyongwe last week, however, admitted to slack implementation of the programme on the part of the tax collector.

"On our part I think we slept on the job in the sense that when we introduced fiscalisation in 2010 we did not complete it and as a result people were lax. Because if you had a gadget and nobody is following up to say why it is off, nobody is collecting the data on it. If you go to countries like Kenya, Tanzania, Rwanda and Uganda where fiscalisation occurred in Africa there was a huge impact on the rate of compliance and this has not happened here. But this is what we are now trying to do."

The tax collection body recently moved to expedite the implementation of the programme by increasing the number of approved suppliers. Previously Zimra had been sanctioned as the only approved supplier.

In terms of the programme all VAT registered operators in Category 'C' as defined in Section 27 of the Value Added Tax Act [Chapter 23:12] were required to have commenced fiscalised recording of transactions with effect from October 1, 2011.

VAT registered operators in categories A, B and D, were also required to have commenced the use of fiscal devices with effect from January 1, 2017 in terms of Statutory Instrument 148 of 2016.

And Statutory Instrument 153 of 2016 requires every VAT registered operator to connect all fiscal devices to the Zimra server for the purposes of transmitting sales data by December 31, 2017.

Official figures show that non-compliance resulted in unpaid taxes rising sharply by 16, 8 percent to $3, 1 billion during the first half of this year.

Successful implementation of the fiscalisation programme will result in Zimra being able to curb any revenue leakages that emanate from under-declarations and under-invoicing of sales. But this will address only a fragment vis-à-vis the broader revenue loopholes that Zimra needs to address.

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