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Fidelis Munyoro Chief Court Reporter
DR Munyaradzi Kereke has approached the Supreme Court challenging a High Court decision that his RMC Hospital should pay the Zimbabwe Revenue Authority close to US$4 million in unpaid taxes for the last three years.
Dr Kereke’s attempts to lift garnishee orders imposed on RMC’s major trade debtors to recover arrears failed at the High Court last week.
The tax collector swooped on the hospital’s debtors — Cimas, Premier Service Medical Aid Society and Stanbic Bank — to collect tax liabilities amounting to US$3 297 103, 62.
The balance is made up of penalties for late payment of taxes, which include Pay As You Earn, income tax and withholding tax. Through his lawyers Magaya-Mandizvidza Legal Practitioners, Dr Kereke filed his notice of appeal on Friday. He argues that the lower court misdirected itself in failing to uphold that the relief RMC sought was interim pending determination of its objection to the Commissioner-General of Taxes” decision to issue garnishee orders.
Dr Kereke argues that during the chamber hearing he established a prima facie case that RMC was not due for taxes.
“The court . . . erred at law in not properly applying the general deduction principle . . . of the Income Tax Act . . . permitting the deduction from taxable income the start-up capital injected by the owner of business,” argues Dr Kereke.
“The court a quo erred in ruling that there was nothing outrageous in respondent’s conduct in taxing Dr Kereke’s house where the hospital is operating from the income of business, which house he bought in 2001, as applicant taxable income for the years 2010-2011.
Dr Kereke says the court fell into another error when finding no fault on Zimra’s conduct to tax twice US$422 878 he injected as a shareholder contribution to the business in 2012 against all proof that his exit package from the Reserve Bank of Zimbabwe had already been taxed. In dismissing Dr Kereke’s High Court application brought under a certificate of urgency, Justice Joseph Martin Mafusire ruled that Zimra’s conduct was above board. He said Dr Kereke should not be treated differently from other tax payers in the country and must comply with the law.
Zimra, he added, acted in terms of the law in effecting the garnishees by invoking Section 69 of the Income Tax Act, which allows the tax collector to directly recover payment from a taxpayer’s debtors. Meanwhile, Dr Kereke’s lawyers say they would file another application at the Supreme Court for the appeal to be heard on urgent basis.
Online Reporter