Zimbabwe may have lost potential revenues running into millions of United States dollars due to lax systems at the Zimbabwe Revenue Authority (Zimra), which is now facing a parliamentary probe.
The tax authority is scheduled to appear before the public accounts committee over various operational and governance irregularities at a yet-to-be-announced date, The Standard established.
Reports by the Auditor General have previously exposed endemic corruption, misappropriation of funds, violation of government laws, and poor corporate governance within the Zimra.
According to documents seen by this publication, Zimra is facing a parliamentary investigation over alleged operational irregularities and financial misconduct.
The documents reveal that there was mishandling of substantial revenue within the organization.
“Looking at unclassified deposits — an amount of ZWL$ 1.6 billion included on the Revenue Return was not receipted and the amounts were not allocated to any tax head by the end of December 2021,” reads the report.
According to the documents, the lack of oversight resulted in some taxpayers continuing to accumulate penalties and interest on purported outstanding amounts.
The report criticized Zimra for failing to adhere to International Financial Reporting Standard (IFRS) 16 concerning the accounting of foreign currency-denominated leases.
“The Authority did not translate foreign-denominated leases using the interbank rate that was prevailing at the time of payment.
“In addition, lease modifications were not also accounted for as required,” it said.
The Zimra e-service platform, operational since 2016, was also found deficient.
“The platform struggled to manage high volumes of transactions during peak periods of return submissions,” the report said.
“Consequently, it failed to capture all returns submitted via email, which served as an alternative submission method.”
This inefficiency resulted in some businesses not being charged civil penalties for outstanding returns, undermining the tax authority’s enforcement capabilities.
The document also noted weaknesses in the control of temporary import permits (TIPs).
“The Authority`s controls over TIPs were not water tight. As a result, there were 26 487 electronic temporary import permits that were issued and had expired and not acquitted as at December 31, 2022,” it added.
“In addition, the Authority issued 43 385 manual temporary import permits during the year, however, the report could not establish the number of manual TIPs that had expired due to weaknesses in the internal controls.
“The report could, therefore, not establish any potential duty in relation to expired TIPs that were not acquitted.”
The Auditor General has been exposing leakages as well as corruption within the tax authority, that resulted in the country losing potential revenues.
In 2021, the Auditor General exposed how Zimra failed to receipt deposits from clients worth close to $2 billion (about US$3 million) in 2020.
On Thursday, Delta Beverages dragged Zimra to the High Court contesting a US$54,8 million tax charge, which it described as an “unjust enrichment”.
The Zimbabwe Anti-Corruption Commission has also nabbed some Zimra officials for corruption, with some having their assets forfeited to the State on charges of being in possession of ill-gotten wealth.
