eBusiness Weekly
Nyemudzai Kakore
HARARE – Finance and Economic Development Secretary Mr George Guvamatanga yesterday apologised for the manner they effected the Intermediary Money Transfer Tax of 2 percent but insisted that the principle behind it was noble.
Mr Guvamatanga said there was room for the tax to be refined going forward if suggestions were proffered to create a win-win situation for everyone.
He said the tax was necessary as it covered the informal sector previously not taxed.
“Hindsight is always a good teacher and we actually believe that we could have managed it differently so I will offer my apologies for not having engaged initially. We did not anticipate the reaction that we got from the 2 percent tax which was our oversight on the matter. We should have handled it better with every stakeholder. In future we will do it differently,” he said.
“We might have conversations around the level of the tax, the exemptions but l think it is important to agree with everyone in this room, that the principle that everyone should contribute, is the right principle.
“It is also important to accept that the structure of this economy has significantly shifted and it has largely gone informal and there was no opportunity for those in the informal sector to also directly contribute to the Government revenue. The underlying principle is that it was a necessary pain to take.”
Mr Guvamatanga said Government wanted to improve its revenue base since it is owed $4,5 billion in unpaid taxes.
He said Zimbabweans enjoyed basic commodities subsidised by the Government like bread, maize meal, fuel, electricity, and cooking oil hence it needed to fund the subsidies.
“We are now working on very stringent measures and a much tighter collection mechanisms and that it will be important for those who are owing to approach the revenue collector and make arrangements to pay the outstanding amount before the stringent measures come into effect,” he said.
“Government is actually owed over $4, 5 billion in unpaid taxes. This figure is too high. The composition of these taxes of significance concern to treasury.
“They are made up of Value Added Tax, Pay as You Earn. In other countries you collect VAT and income tax as an agent of the Government and the expectation is that within a specified number of days, it is handed over to Government. When you don’t it is theft or crime.”
Mr Guvamatanga reiterated that the three tire pricing system is illegal.
