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Golden Sibanda Senior Business Reporter
Taxable entities that delay their tax remittances face stiffer penalties after Finance and Economic Development Minister Mthuli Ncube hiked interest on outstanding debts by 400 percent. Interest on outstanding debts has been 5 percent, but has now gone up to 25 percent.
Presenting the 2019 Mid-Year Fiscal Policy Review Statement and $10,85 billion Supplementary Budget on Thursday, Prof Ncube said non-compliance with tax legislation continued to deprive Government of revenue to support critical issues such as infrastructure and social services.
This comes as Government is looking to realise tax revenue of $12,748 billion to fund an array of key public programmes, including the civil service wage bill, infrastructure projects, health, education and agriculture.
“A number of taxpayers deliberately delay remittance of tax to Government in order to fund their operations,” said Prof Ncube said during the presentation in the House of Assembly attended by President Mnangagwa.
“In order to discourage taxpayers from such practices, I propose to review the interest rate paid on outstanding debts from the current 5 percent plus Libor (London Interbank Offer Rate), to 25 percent.”
The Zimbabwe Revenue Authority (Zimra) is owed $4,5 billion in tax arrears by companies, some of them owned by top politicians and respected businesspeople.
Of the outstanding amount, about $2 billion of this (50 percent) is the principal debt, while $1 billion (23 percent) is in interest, with the remaining $1,1 billion (27 percent) being penalties.
Online Reporter