HARARE: The phone rings just as dusk begins to set in. On the other end is the voice of an agitated man who asks to meet me at the Long Cheng Plazza in Harare.
The caller refuses to disclose the purpose of the meeting and I reluctantly agree, unsure of what might befall me there.
Holding a khaki envelope, he takes his seat carefully looking in all directions as if he is being followed. He refuses my offer to buy him a drink and quickly gets to the point.
“My friend, we are tired of the Chinese. They ill-treat us and bring labourers from their country to do all the jobs we are able to do. They do not pay taxes and are cheating us. I have had enough of those people,” he says.
He hands over the envelope and asks me to pursue the matter, before scribbling the number of a Zimbabwe Revenue Authority (Zimra) employee on a piece of paper.
The envelope contained the payroll for Jinan Corporation which mines diamonds in the eastern part of Zimbabwe and is currently at the centre of a tax dispute with Zimra. Jinan is accused of under-declaring Pay As You Earn (PAYE) taxes by producing a parallel payroll.
The payroll shows that Chinese expatriates working for the firm are being paid $200 a month. According to Zimbabwean tax laws, a person earning $200 or less is exempted from paying income tax.
The company insists it is paying this figure despite the poverty datum line being pegged at $511 a month, and the said salary being inadequate to cover even accommodation rentals for the workers.
A tax expert we interviewed on the matter said it was highly suspicious that the company was paying only $200 to its workers.
If this is the case then the company should be giving certain allowances and benefits to its workers, which it should declare to the tax authority in its payroll.
PAYE regulations require that taxes are paid for work done in the country. The company is also supposed to declare any allowances and benefits which it awards to its Chinese labourers to the revenue authority. But this has not been happening, according to the whistle blower and documents he handed over to us.
Jinan Corporation, a mining company involved in diamond mining at Chiadzwa in the eastern part of Zimbabwe, is believed to be bringing in labourers from China whom it now claims to be paying these wages. Chinese labourers are listed by the company as earning $200 but black Zimbabwean workers dispute that this is the case.
“Chinese workers are mainly supervisors and managers and it is highly unlikely that they are paid as little as $200,” says Cosmas Sunguro, President of the Zimbabwe Diamonds Workers Union.
Efforts to get comment from Jinan officials were fruitless. ZIMRA Director of Legal and Corporate Services, Florence Jambwa, refused to comment on the matter, quoting Section 34A of the Revenue Authority Act (Chapter 23:11) which bars them from providing specific information pertaining to its clients to a third party.
She said that she was “therefore unable to comment or provide the requested information because it is protected by the secrecy provisions of the Revenue Authority Act”.
But our sources in ZIMRA, speaking on condition of anonymity, confirmed the case and revealed more such cases involving the Chinese.
In another case of flouting tax regulations, a Chinese company recently applied for a duty rebate in order to import machinery that was intended to drill boreholes in the drought stricken Matabeleland South region.
However, the firm diverted the machinery and started drilling boreholes in Mashonaland Central instead, in a suspected case of rebate fraud.
The case has now sucked in a government minister (name supplied) after the Chinese company refused to pay penalties, arguing that they had been arm-twisted into violating the rebate conditions by a cabinet minister. Such cases are often swept under the carpet as culprits bribe officials to let them off the hook.