Fatcats evade tax

Harare Bureau
Public and private company managers getting hefty salaries are not paying their full taxes with some of them manipulating loopholes in the revenue collection system to evade taxes, the Zimbabwe Revenue Authority has said.Zimra Commissioner-General Gershem Pasi has also said it is investigating several cases of tax evasion but is finding the going tough because anti-graft authorities are complicit in corruption.

Information gleaned by our Harare Bureau indicates some firms, both in the private and public sectors, could be running parallel payrolls.

Indications are that there are “official” payrolls that show reasonable salaries and benefits. These are the ones made available to tax authorities.

Separate pay systems see cash directly paid to managers without anything reaching Zimra.

It is believed that some of these huge payouts are being made in cash or as deposits in foreign bank accounts.

Responding to questions at a stakeholders’ workshop for Members of Parliament hosted by Zimra last week, Pasi said some company boards were approving flawed systems allowing them to manipulate legal systems.

Recent weeks have seen the media revealing huge packages paid to managers at State-linked enterprises, with the figures eliciting outrage from ordinary people.

“The operating systems in several companies have loopholes which allow for different boards of some companies to endorse authorised systems that are flawed,” Mr Pasi said.

Pressed for details on the how the parastatal bosses were evading full payment of taxes,  Pasi said the matter was under investigation.

He said they were working on a system that would prevent corruption.

“We are working on a system to safeguard against corruption and we need a holistic approach at national level to fight this cancer,” he said.

Mr Pasi said law enforcers expected to deal with corruption, were in fact, part of the problem making it difficult to address the scourge.

He said government institutions were also not paying taxes, resulting in them owing Zimra more than $500 million in tax arrears.

“Government owes money and companies are not able to pay taxes. Even if they make payments there is no money in the bank hence the need to first get the economy functioning,” he said.

Last week, it emerged that PSMAS chief executive officer Cuthbert Dube and ZBC boss Happison Muchechetere earned $230,000 and $27,000 per month respectively.

When benefits are factored in, Dube earned half-a-million dollars every month.

The mega salary rivals earnings by celebrity soccer stars in the cash-rich Barclays English Premier League.

Dube, who has since been forced to retire, got allowances equivalent to his monthly basic salary of $230,000 plus a bonus of over $1 million in December 2013.

Several senior managers at PSMAS also took  home more than $1 million in earnings last year  at a time many people earn less than $500 per month.