Zimbabwe taxman targets Zanu-PF chefs

EIN News
This post was originally published here

The country’s nouveau riche – especially bigwigs in Zanu-PF who have made enormous wealth in the midst of widespread poverty – face lifestyle audits by the Zimbabwe Revenue Authority (Zimra), which is desperate for revenue to fund President Robert Mugabe’s bloated administration that has gained notoriety for overshooting its budget.

Over the years, the tax collector has been under pressure from corruption watchdogs to spotlight the mighty and powerful in Zimbabwe whose riches are not commensurate with their incomes.

After dilly-dallying for years, Zimra has summoned its courage to crack down on major fiscal crimes in a bid to recover billions of United States dollars stashed in undeclared assets kept by citizens in and outside the country whose economy has been stuck in the intensive care for the past two decades.

Zimra confirmed this week that it will be going for the rich and famous notwithstanding suspicions that the tax collector might find it difficult to crack the bigwigs in Zanu-PF.

Already, there are choruses of disapproval from within the ruling party, with some of the bigwigs in Zanu-PF lashing out at those who called for the implementation of lifestyle audits.

Zimra board chairperson Willia Bonyongwe told the Daily News yesterday that the lifestyle audit would not stop despite remonstrations by Zanu-PF heavyweights.

“What I know is that the policy does not discriminate anyone at all. I think the other thing people don’t appreciate is that Zimra does not ask how you got the money. But once you have it you must declare all your income and pay the requisite tax,” she said.

“Zimra penalises you for hiding your income and this has been happening to many in business and in politics alike. But I always say we don’t talk about individual taxpayers and if they also don’t disclose you will never know. So you cannot say we target others and not others,” she added.

In a revenue performance report for the first half of the year, Zimra said the issue of tax avoidance was at the top of the global agenda.

“Firstly, Zimra has always done lifestyle audits on members of the public, the fact is Zimra deals confidentially with taxpayers and unless the taxpayers themselves go public, no one would ever know,” Bonyongwe said in the report.

“It is a strategy used globally by all tax authorities and will not stop, however, there is always room to improve upon the way they are done and Zimra is open to suggestions. People need to have a culture of paying taxes, then there are no problems.”

Zimra is battling to raise revenue for a bankrupt Treasury in the wake of company closures across industries and rising unemployment.

While the informal sector is burgeoning in terms of growth in the number of actors, it is not contributing to the fiscus.

Zimra has therefore found itself with very few options but to tackle the top echelons of the ruling party bigwigs and the filthy rich executives and businesspersons.

Not many believe the taxman will succeed.

Political analyst, Dewa Mavhinga, yesterday said a lifestyle audit alone is not enough to address issues of corruption.

He said the first step was for all political leaders and senior civil servants to declare their assets and be subjected to periodic lifestyle audits.

“It does not appear that there is the political will under the current administration to root out corruption and implement lifestyle audits across the board,” said Mavhinga.

Maxwell Saungweme, another political analyst, had this to say: “It’s a public secret that all the bigwigs will fail the audit. So there are no incentives for them to do it. No political will to do it”.

This comes after Finance minister Patrick Chinamasa told the recent World Bank economic update symposium that “a lifestyle audit infringes too much into the privacy of the individual and can be quite detrimental in the sense that there will be room for abuse as you will decide who you want to go after generally and it’s not good, it’s not good.”

Reports have indicated that Zimbabweans have externalised billions of money, ranging from the relatively small bank deposits in neighbouring countries, to millions stashed in tax havens globally.

In spite of the tenuous economic situation, the gap between the haves and have-nots is widening in Zimbabwe.

In leafy suburbs across the country, a mix of top-end apartments, luxury penthouses and sprawling mansions that surpasses some of the properties acquired by celebrities in Hollywood, are a common sight, including luxury cars.

Bonyongwe said it is the revenue authority’s view that because of globalisation and the anti-money laundering laws currently in place worldwide, the Reserve Bank of Zimbabwe can and should trace, follow and bring back what was irregularly externalised through the banking system.

“We have to bring back what is due to Zimbabwe,” she said.

Zimbabwe has long struggled to collect enough tax revenues to cover what it spends.

Zimra has vowed to go after tax dodgers and end what the International Monetary Fund has called “wide tax evasion and corruption.”

Critics and the opposition accuse Mugabe, in power since independence in 1980, of failing to tackle high level graft, and say endemic corruption is one reason that foreign companies are hesitant to invest.

“There will be no lifestyle audit for bigwigs as long as Zanu-PF remains in power under President Robert Mugabe,” MDC spokesperson Obert Gutu told the Daily News.

“If you can show me one single Zanu-PF bigwig who isn’t corrupt then I will be able to show you a prostitute who is a virgin.

“Zimra is simply playing a political game. Each and every Zanu-PF political bigwig is corrupt to the bare bones and as such, there is absolutely no genuine appetite to launch a lifestyle audit. If Zimra is really serious about launching lifestyle audits then they should start by auditing the posh and extravagant lifestyle of the First Family,” said Gutu.

Divorce cases in Zimbabwe have thrown a rare spotlight on the vast wealth acquired by the regime’s inner circle.

Shocking details of assets acquired by Zanu-PF bigwigs have been placed before the Harare High court by estranged wives seeking part of their husbands’ assets and maintenance.

Though Zimbabweans are aware that some prominent members of the ruling Zanu-PF party have grown very rich since independence in 1980, it is unusual for the details of these fortunes to be exposed

Opposition PDP spokesperson Jacob Mafume said: “The political will is completely absent.”

Many Zimbabweans also perceive officials at Zimra, especially those operating on the country’s borders, to be corrupt.

Zimra has also launched an internal lifestyle audit targeting its staff, but the crusade has been dogged by accusations by shop floor workers that it’s leaving out the tax agency’s big fish.

The success of this effort will go a long way to determining Zimbabwe’s financial future.

The government hopes toughening up on taxes will not only stave off the threat of sovereign default, but also transform the political and economic relationship between the state and Zimbabwe’s 13 million citizens.

The government has set up a hotline to report incidents of bribery or tax evasion and introduced rewards for information leading to arrests for those crimes.

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