Savanna clears Zimra debt

March this year.

Savanna had allegedly been reported to be owing Zimra a total of US$5 million in unpaid excise duty with US$654 522 having been garnished as at March 12, 2013. A company spokesperson said Savanna remains committed to meeting its tax obligations but, however, said like any other player in the industry they were not immune to the liquidity challenges prevailing on the market.

“We confirm that we had a dispute which we addressed with Zimra culminating in the issuance of a tax clearance certificate. This clearly indicates that the driver of the garnishee has been amicably addressed,” said the spokesperson.

Savanna further said it hoped for a realignment of tax laws as Zimra expects that all excise taxes for sales up to month end are cleared by the 20th of the following month.

This therefore poses a serious cash flow strain in an illiquid market where most of cigarette manufacturers sell their products on credit to retailers and as such debtors would not have settled their accounts when taxes are due.

Last week the Tobacco Industry Development Support Institute hosted a tax seminar in Harare where stakeholders submitted recommendations to Zimra and the Finance Ministry on tax matters including deadlines they feel are sustainable towards the industry’s viability.

Representations were made by excisable industries to Zimra to amend this date to match the VAT payment dates, which are the 25th of each month. The Savanna spokesperson expressed optimism that authorities will take into consideration their concerns and come up with a favourable legislative framework.

“We remain hopeful that the Ministry of Finance will address this challenge in the pending policy statement given that with the cash flow challenges in the market customers are struggling to pay on time and in some instances struggling to pay altogether.

“We are therefore not immune to the environment in which we operate and will thus, like all other companies, face cash flow challenges from time to time and as a growing company there will also be pressure on cash flow which is normally mitigated by facilities in a liquid environment,” he              said.

Commenting on allegations in the market about the tobacco espionage saga last year he said:  “What we faced in terms of espionage culminating in hijackings is irrefutable and we have affidavits from the perpetrators of some of these activities admitting that they assisted the South African entity called Forensic Security Services, who are service providers to some non-multinational companies, to conduct espionage activities on our factory.”