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THE announcement of a six-month tax amnesty on defaulting firms last October came as a reprieve for businesses most of which have been struggling to meet their statutory obligations because of the difficult economy.
The government announced the waiver of penalties, prosecution and interest for non-payment and irregularities of all taxes covering the period from February 2009 to September 2014 in a bid to bring relief to financially strained firms and encourage compliance. The move demonstrated the government’s pro-activeness and commitment in redressing the economy and helping companies to regain footing.
While paying tax is a statutory requirement that warrants arrest or penalties on defaulters, the amnesty is a lenient gesture of saying “let’s reconcile”, which all concerned firms should take advantage of.
However, it is disappointing that very few defaulting companies have approached the Zimbabwe Revenue Authority (Zimra) to apply for the tax amnesty.
We reported yesterday that with only a month before the lapse of the initial six-month amnesty, which has been extended by nine more months, only a handful of firms have applied.
Zimra Midlands provincial head of audits domestic taxes, Agnes Huvaya was quoted during a Shipping and Forwarding Agents Association of Zimbabwe business workshop in Gweru saying the response for the amnesty facility was disappointing.
We feel businesses are doing themselves a huge disservice by rejecting the amnesty, which is meant to benefit them.
Paying tax is not negotiable. It’s a legal requirement and defaulters must know that they cannot evade tax and get away with it. They need to cooperate with the government and comply with the law or cease operations. Rejecting such a rare reprieve is tantamount to shooting themselves on the foot.
“We’ve made so much noise about issues to do with tax amnesty and it’s even being publicised in the media but to our surprise the response has been lukewarm,” said Huvaya.
“We’re however, encouraging corporates to take advantage of this tax amnesty because after the deadline if your books aren’t in order there would be consequences in this respect.”
We share the view that there is no need of harbouring skepticism about the sincerity of the amnesty, which has been provided for by law although some regard it as a ploy to corner them to disclose “private” information about their operations and net them.
We feel concerned businesses should engage openly with Zimra where they need clarity and play their part for the economy to move forward.
Due to depressed economic climate, tax evasion had been rampant over the years, prejudicing the government of revenue it so much craves. The initial tax amnesty, which became effective on October 1, 2014, will expire on March 31, 2015.
The regulation known as Finance Act (Tax Amnesty) Regulations was published on November 21.
The government has said the tax amnesty presented an opportunity for all persons and businesses to disclose incomplete or unreported information relating to the payment of tax and to settle the principal tax, duties or amounts due.
Those companies that are under probe are not eligible to benefit from the amnesty.
Online Reporter