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Business Writer
The Zimbabwe Revenue Authority (Zimra) has garnished Harare City Council (HCC) bank accounts over $115 million in outstanding taxes.
The taxman uses garnishee orders to compel non-compliant firms and entities to pay up.
But HCC says the garnishee has constrained its capacity to offer effective services to ratepayers.
“The garnishee order is adversely affecting Council’s daily operations as the City cannot honour payments to service providers including fuel and water treatment chemical suppliers,” said HCC.
“This has seen the City failing to collect refuse in time resulting in garbage piling up across the City. The City is resultantly failing to pay its workers.
“Management is currently engaging the revenue collector to seek relief so that available resources can be ploughed into service delivery. Revenue inflows have been affected by the effects of Covid-19.”
The Value Added Tax Act empowers Zimra to garnish companies’ bank accounts without a court order and to unilaterally recover tax owing through collecting money from the firms’ debtors.
The garnishee orders have been challenged by some firms in the Constitutional Court.
However, Zimra has maintained that its garnishee orders are constitutional, arguing that the order “overrides all provisions that may be enacted under any other laws. The order is challenged only on administrative grounds, for instance, if Zimra has not followed the due process or erroneously placed it.”
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