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Fidelis Munyoro Chief Court Reporter
The Zimbabwe Revenue Authority should be stopped from using its statutory powers to collect huge sums of money from businesses without making proper tax assessments, RMC Hospital owner Dr Munyaradzi Kereke has said.
Dr Kereke, who is embroiled in a US$1,7 million battle with the revenue authority over alleged non-payment of tax for the past three years, said to allow the levying of his hospital business pending determination of his appeal and objection to tax assessment breaches the law.
Dr Kereke made the appeal in his heads of argument, prepared by lawyer Advocate Lewis Uriri, and filed at the Supreme Court on Wednesday.
He argued that the tax assessment on his business was grossly unreasonable and for the lower court to uphold garnishes imposed on RMC’s major debtors pending appeal was unlawful.
“This is more so given that respondent (Zimra) does not need the sanction of a court and is afforded the right of self help by statute,” stated Dr Kereke.
“Unless carefully controlled, that right to self help can be used to the ultimate destruction of the principle underlying revenue collection.
“It is not to drive tax payers into liquidation, but to raise revenue for Consolidated Revenue Fund.”
At the Supreme Court, Dr Kereke will not seek to impugn the manner in which Zimra arrived at the decision, but the rationality of assessing tax in a manner allegedly contrary to the law.
He will also argue that Zimra’s conduct has been heavy-handed, citing a 2011 incident when an alleged fictitious assessment was thrown at RMC.
Dr Kereke will state that after pointing out abnormalities, Zimra furnished him with a second assessment which reduced the assessed taxable profit from US$2 468 340 to a loss of US$297 609.
His papers also say that in 2011, Zimra again changed the assessed confirmed loss position of US$297 609 to alleged positive profits which formed the basis for his objections and the High Court application.
In this case, Dr Kereke says the finding of the lower court that such random assessments were normal on the basis of fresh information allegedly is a complete misdirection because he placed on record proof that vital information regarding that year was in fact long provided to Zimra.
He contends that while Section 69 of the Income Tax Act empowers Zimra to garnish for assessed taxes, RMC was grossly violated because the assessments were fictitious and, therefore, unlawful.
Dr Kereke appealed to the superior court to quash the lower court’s decision and lift garnishee orders imposed on RMC’s major trade debtors — Cimas, Premier Service Medical Aid Society and Stanbic Bank — to collect tax liabilities amounting to US$3 297 103,62.
The balance was made up of penalties for late payment of other obligations, including Pay As You Earn, Income Tax and Withholding Tax.
Early this month, Zimra slashed RMC’s tax bill from the original US$4 million to US$1,7 million after Dr Kereke submitted information required for the assessment of taxes for the last three years.
Online Reporter