Chronicle EditorWalter Nyamukondiwa Chinhoyi Bureau
Zvimba Rural District Council has managed to avert garnishment of their bank accounts by paying and reviewing terms of their $8,5 million Zimbabwe Revenue Authority (Zimra) tax debt.
Through renegotiation of a retrospective debt where rural councils were now expected to pay Value Added Tax (VAT), the debt has been reduced to $2,3 million. This is coupled with a payment plan which sees the rural local authority paying $20 000 every month to offset the debt.
Chief executive officer Mr Peter Hlohla said the debt emanated from a decision by Zimra to have rural councils pay VAT for revenue generated from stand sales and plan approvals, among others.
“The debt has been reduced after we engaged tax consultants, who helped in having the obligation reviewed,” said Mr Hlohla.
“The debt was calculated backdated to 2009 when the country dollarised. The debt included VAT and penalties for when we were not paying.”
The development saw Zimra at one time trying to garnish one of Zvimba RDC accounts before a settlement involving a payment plan was reached.
The consultant negotiated for waivers and write-offs in some instances, resulting in the debt being reduced significantly. Mr Hlohla said council was up-to-date with current obligation and was working to clear the debt. The decision to also include money for stands which have not been paid for, put council in a quandary.
“People pay deposits and monthly instalments thereafter, but when the calculations were done, they included money that has not yet been received by council,” said Mr Hlohla.
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