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Over the years, parastatals have not been fulfilling their statutory obligation of remitting tax to the country’s revenue collector.
“We had a consultative meeting on Monday to address the inter-parastatals debt. We resolved that as part of its resource mobilisation, the Ministry of Finance should consider factoring in the injection of $163 million into Zimra so that the parastatals’ debt to the revenue authority is cleared.
“The entities have in the past not met their statutory obligation of remitting taxes such as Pay As You Earn and corporate tax to Zimra,” he said.
The consultative meeting was attended by officials from entities such as the National Railways of Zimbabwe, NetOne, TelOne, and the Grain Marketing Board and the parastatals line ministries.
Minister Moyo said their resolution did not mean that the capital injection would be made anytime soon as Treasury’s fiscal space was limited.
“The Ministry of Finance will not release the funds to individual entities because the resources may end up being channelled towards meeting other needs by the parastatals,” he said.
If injected directly into Zimra, Minister Moyo said the funds would make a huge difference in terms of bringing sanity to the entities’ balance sheets.
It was also resolved that the public entities should create bilateral arrangements among themselves that would result in debt swap.
“We are not going to have a situation where parastatals will have to do debt cancellation. If that is to be done, it has to go through Parliament and approved by Cabinet. We agreed at the consultative meeting that inter-parastatal debt can be offset through debt swap.”
Inter-parastatal debt swap refers to the entities paying each other by providing services or goods in offsetting the amount owed.
Minister Moyo said it was also resolved that the restructuring of State enterprises was critical to improve the operational efficiency of the entities.
Of late, Government has expressed concern over State enterprises’ indebtedness among themselves resulting in the accumulation of cross arrears that have generated negative spill-over effects in the whole economy.
Inter-parastatal debt rose by 69 percent to $1,5 billion in the six months to March this year.
Online Reporter