The Zimbabwe Revenue Authority (Zimra) has started reviewing the country's tax system to accommodate small to medium businesses as it angles to boost the country's revenue base, an official said yesterday.
Zimra Commissioner General Faith Mazani said the authority was taking bold steps to encourage the payment of taxes on time to push the Domestic Revenue Mobilisation initiative.
It is understood that SMEs currently make up about 70 percent of registered taxpayers and contributing close to 20 percent to tax revenue.
In a speech read on her behalf by executive officer responsible for Corporate and International Affairs Mr John Chakasikwa at the ongoing media training on taxation and trade facilitation in Vumba, Mutare, she said:
"Zimra understands the importance of SMEs and how they impact on the economy. We are in the process of reviewing our taxing systems to accommodate the SMEs so that they contribute meaningfully to the economy, but also with limited cost on their part.
"Our research is looking at the feasibility of introducing a Turnover Tax, which will be a percentage on the income made by any person engaging in any kind of business.
"They can then pay their tax by mobile phones say end of each week or as at their desired frequency within each month".
Ms Mazani said the authority was also rolling out tax education countrywide to promote voluntary taxation and compliance.
She said it was important to promote the country's revenue base to fund government commitments including social services.
"We would want to see our SMEs growing into large corporates, but with a full understanding of their corporate responsibility.
"We are also asking for the media, which plays a critical role in cultivating a culture of paying taxes and customs duties in Zimbabwe to partner us in spreading the message of voluntary taxation so that we boost our domestic revenue," said Ms Mazani.
She said on the business side, voluntary tax compliance reduces unnecessary business costs, which come in the form of penalties and interest levied for late payments or submission of returns, or failure to submit returns or remit payments.
The Zimra boss said the push for voluntary tax compliance was in line with Zimra's vision of instituting fiscal laws with very limited enforcement being done by the organisation.
Ms Mazani added that the authority had come up with a number of strategies to fight corruption, tax evasion, smuggling, money laundering, transfer pricing and all forms of illicit behaviour, which affects the country's economic development.
"To fight smuggling, the authority uses scanners, risk profiling and physical examination, post importation audits, border patrols and road blocks in conjunction with the law enforcement agencies.
"In addition, we continue to engage companies, which owe taxes, customs and excise duties to agree on payment plans to liquidate their debts.
"It is important to note that Zimra will only use garnishee orders in instances where taxpayers fail to cooperate with the authority in coming up with , and adhering to payment plans," said the commissioner general.
Recently Zimra said it was owed over RTGS$4 billion by defaulting companies.