HARARE: Zimbabwean businesses owe more than $1 billion in tax arrears to the government, double the figure in 2013, the national tax agency said on Thursday, as companies struggle in an economy that is slowing sharply.
Taxes finance the entire budget in the southern African country because lenders like the International Monetary Fund and World Bank have said they will only resume supporting Zimbabwe once it clears its debts with the global lenders.
Gershem Pasi, the Zimbabwe Revenue Authority (ZIMRA) commissioner general told a committee of parliament that tax companies were struggling to stay afloat due to lack of credit, power shortages and competition from cheap imports.
“We had $500 million owing (in 2013), which is now more than a billion dollars. It’s money owed on agreed terms, where companies, businesses come and say we have this problem, can we have terms to pay,” Pasi said.
As Zimbabwe’s economy flatlines, companies are being forced to lay off workers or close altogether, forcing workers to hawk goods for a living in the informal sector where they do not pay taxes.
The government has projected that the economy will grow by 3.1 percent this year, but many economists see no growth at all.
Pasi said small businesses and those in the informal sector were not settling their tax obligations but that ZIMRA would conduct a pilot programme to bring them into the tax net.
Pasi said ZIMRA would also target public taxis, most of which are not registered, by installing electronic devices in taxis, which would transmit data to its offices.
“The meters that we will put in those taxis will be linked to our systems real time and if anyone tampers with the system, the vehicle will not start,” Pasi said.
