ZIMRA garnishes 100 company accounts monthly
BULAWAYO — The taxman is garnishing bank accounts of at least 100 firms monthly in a bid to force tax evaders and defaulting companies to pay their tax obligations.
There has been mounting criticism over the garnishee orders, with many arguing that this has bankrupted many businesses.
But Zimbabwe Revenue Authority (ZIMRA) commissioner general, Gershem Pasi, has challenged business executives to bring evidence of any firm that has closed because of the taxman.
In other words, Pasi believes that the company closures being witnessed in Zimbabwe’s crisis-hit economy have everything to do with the executives’ own delinquency and mismanagement.
ZIMRA’s acting commissioner for domestic taxes, Innocent Chikuni, last week said garnishee orders were always the last resort, as the taxman favoured engagement with taxpayers.
He said the garnishee orders ZIMRA issued in any single month were far less than those issued by other tax collectors in the region.
In neighbouring South Africa, for instance, between 4 000 and 8 000 bank accounts were being garnished by the South African Revenue Service in a single month.
“We are all aware that companies need to survive and cannot survive when we continue to place garnishees,” said Chikuni.
“ZIMRA commissioner-general Gershem Pasi is on record saying that (garnishing of accounts) is the last resort and that is the truth. It is the last resort. Unfortunately, when some of us are garnished, we obviously are not at liberty to exactly say how far we would have gone in engaging ZIMRA.”
Chikuni admitted that ZIMRA officers used to make mistakes in their decisions to garnish company accounts. Corrective steps have since been taken to ensure that garnish orders were not signed by any other person except the regional manager or anyone acting in that position.
“Before we place a garnishee order we need to ensure that there is a history of engagement with the client, a history that shows that the client has been given reminders or a final reminder, whatever it is or there is evidence that a payment plan has been negotiated before and the client never followed up the payment plan,” he said.
“So an officer does not just wake up in the morning to go and place a garnishee order. Of course clients would say when you go to place a garnishee, you do not tell us. We do not tell you. There is no reason to tell you that I am going to place a garnishee. Of course, your bank would be able to tell you that your account has been garnished because communication would have happened before which you should know about. So officers don’t just place garnishees willy-nilly, unless, like I said, there is a mistake,” he said.
Chikuni said in dealing with tax arrears, it was impossible for ZIMRA to establish a standard procedure; he stressed that the tax collector would stick to payment plans which would have been negotiated with the client.
“In spite of the standardisation of these procedures, cases brought by taxpayers vary in terms of their complexity, amounts owed, record of compliance with previous proposals, the taxpayer’s attitude to the debt, levels of co-operation during audits, level of disclosures, business and various other factors that are specific to different taxpayers,” he said.
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