Zimra, Time Security tax dispute spills into court

Daniel Nemukuyu Senior Court Reporter
Time Security has taken the Zimbabwe Revenue Authority and the British Embassy in Harare to court challenging the tax collector’s de facto decision to use the diplomatic mission as an agent for collecting outstanding taxes.Time Security owed Zimra taxes and at the same time the British Embassy in Harare owed Time Security US$28 580 for services provided to the mission.

It is alleged that Zimra convinced the British Embassy to forward the US$28 580 to it to cover the taxes owed by Time Security.
This, Time Security argued, meant that Zimra had technically made the British Embassy in Harare a tax collection agent.

Zimra, it is also alleged, collected US$29 024,50 owed to Time Security by Lobels Bread. The security firm, which is now under liquidation, also says Zimra sought to collect US$44 121,95 from Cairns Foods and US$55 675 from ME Charhons.

Time Security, through its lawyer Advocate Thabani Mpofu, argued that the British Embassy, being a foreign government office, could not legally collect revenue on behalf of its host State.

“An embassy is not a person as contemplated by provisions of Section 58 of the Income Tax Act,” said Adv Mpofu. “It is, therefore, not possible for first respondent (Zimra) to constitute the embassy as a person.

“The British government and indeed its embassy in Zimbabwe cannot at law enforce revenue laws. It follows, therefore, that it cannot be required to collect revenue on behalf of its host State.

“That being the case, the monies held by second respondent (British government) through its embassy in Zimbabwe must be remitted to the liquidator to be dealt with in accordance with the law.”

In respect of money held at Lobels, Cairns and ME Charhons, Time Security argued that the money should have been collected before the firm was placed under liquidation.

The security firm argues that there is no law that prefers Zimra above all other creditors in matters of insolvency. Time Security wants the court to direct the British Embassy and the three other companies to pay what they owe to the security firm’s liquidator, Dr Cecil Madondo, and not to Zimra.