peter
Munyaradzi Musiiwa, Midlands Correspondent
The country could be losing millions of US dollars to rogue retailers and businesses who are not banking nor declaring sales done in foreign currency.
Addressing journalists at a virtual press conference, Zimbabwe Revenue Authority (Zimra) Commissioner General Ms Faith Mazani said businesses are violating provisions of Statutory Instrument 185 of 2020 allowing businesses to -transact in foreign currency by not declaring their earnings thereby evading tax.
Ms Mazani said some businesses were receipting transactions performed using foreign currency with Real Time Gross Settlement (Rtgs) receipts.
“As you are all aware, on 17 June 2020, the Reserve Bank Governor announced the dual pricing system, wherein businesses can now accept payments in foreign currency. The announcement was followed by the gazetting of Statutory Instrument 185 of 2020 as the Exchange Control (Exclusive Use of Zimbabwe Dollar for Domestic Transactions) (Amendment) Regulations, 2020 (No. 3).
Statutory Instrument 185 of 2020 was aligned with the provisions of Section 4A of the Finance Act which requires that tax be paid in the currency of transaction.
In line with SI 185 of 2020, Zimra issued a Public Notice No. 40 of 2020 addressing certain business malpractices.
Said Ms Mazani: “Among the observations made Zimra noted that some businesses are not recording transactions being tendered for in foreign currency.
Where transactions have been recorded, part or all the foreign currency tendered is not being declared for tax purposes. Transactions in foreign currency are being written in manual registers. Operators are receiving foreign currency from their customers and issuing them RTGS receipts,” she said.
Ms Mazani said the foreign currency tendered is not being banked.
“Parallel manual invoicing is being used for recording transactions involving foreign currency, and such invoices are not declared for tax purposes.
There are stand-alone tills, which are not configured to the Zimra fiscalisation system.
Some traders have created back offices and banking halls where forex payments are being received but not receipted nor declared on returns.
Offline separate systems are being kept for transactions involving foreign currency,” she said.
Ms Mazani said Zimra is conducting tax audits to monitor tax payments in foreign currency.
She said Zimra will penalize noncomplying businesses as well as naming and shaming them.
“Tax audits focused on monitoring of tax payments in foreign currency are currently ongoing. Any detected noncompliance will be sanctioned as provided in the law through charging of penalties and interest, prosecution, naming and shaming non-compliant sectors.
Our valued clients are therefore encouraged to avoid attracting the above sanctions and do the honorable by correctly declaring all their tax in full, on time all the time,” she said.
Online Reporter