Chronicle Editor
Leonard Ncube in Victoria Falls
THE Construction Industry Federation of Zimbabwe (CIFoZ) is lobbying Government to amend the Pay As You Earn (PAYE) law to allow players in the industry to pay tax returns as and when they get paid by their clients.
The Zimbabwe Revenue Authority (Zimra) collects taxes at prescribed periods and CIFoZ has said the conditions are not favourable to the construction industry.
Speaking in Victoria Falls recently CIFoZ chief executive Engineer Martin Chingaira said a majority of members were in tax arrears because of the unfavourable tax laws.
He said construction was a unique industry that needs to be handled differently.
“Construction is a unique industry where we are paid after finishing a certain stage. Each stage has to be inspected and approved before being given to the client for payment.
“During that process time will be moving and Zimra would come wanting their tax,” he said.
“We have tried to reason with them but they don’t consider this. We need to lobby the Ministry of Finance to consider the construction industry to pay VAT on cash payments, whereby Zimra should wait for the day we get paid then they can give us the seven days to pay our tax returns.
“This should be through calling amendment of the PAYE to consider the construction sector uniqueness.”
Eng Chingaira said contractors were willing to pay but want to pay in lump sums after getting paid by their clients. He was speaking at the close of CIFoZ congress here. As part of resolutions, delegates want to be exempt from registering with local authorities when they bid for tenders.
“Local authorities should remove these restrictions because we’re already registered with the parent ministry hence that’s double taxation. For ease of doing business, we are saying let’s remove these extra costs because they are scaring away investors,” said Eng Chingaira.
Delegates also implored Government not to contract itself as this was leaving the private sector without jobs. Eng Chingaira noted that Government had decentralised public works to different ministries who are now creating own construction units.
This, he said, was not proper as Government should remain a client. Eng Chingaira said the Contractors Bill was overdue and should be expedited to protect local companies from foreign entities who enjoy an unfair advantage yet they do not often pay tax.
He encouraged the construction industry players to form joint ventures and consortiums to enhance their chances in national projects. Plans are also underway to open industry training schools to capacitate graduates with practical skills as most of them are inexperienced when they leave college and cannot be absorbed by the industry.
Eng Chingaira said engagements were underway with the parent ministry for land to build such schools where trade testing will take place. Minister of State for Matabeleland North Provincial Affairs, Richard Moyo, whose speech was read by Mr Tapera Mugoria who is a deputy director in the provincial office, challenged the construction sector to find its niche in economic transformation programme.
He said the province presents a lot of opportunities including housing, construction, road construction, water harvesting infrastructure and business hubs among others.
CIFoZ was formed in 1915 by players in the building, suppliers, contractors and sub contractors and has 600 construction companies who are members.
The theme for the conference was: “Strengthening infrastructure value chains through local participation, partnerships and capacity building for key institutions”. — @ncubeleon
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