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Zimbabwe Revenue Authority (Zimra) Commissioner General, Gershem Pasi has accused government of contributing to the current trade deficit through its importation of duty free products accounting for over $4 billion.

Briefing a parliamentary portfolio committee on Foreign Affairs Tuesday, Pasi said of the country’s $7 billion worth of imports, government accounts for over 60 percent while taxable imports account for the smaller chuck for taxation.

“Of the $7 billion imports, $4.1 billion is government imports which don’t pay duty, and then you take imports from COMESA, SADC and bilateral agreements which chew another chunk. Applying import duty on the whole bill would be unfair,” he said.

“There has been talk of leakages within Zimra in relation to the value of imports and duty collected, well, one thing people don’t realise is that government is importing over $4 billion duty free goods and these add up to the value of imports but does not contribute to the amount of duty,” he said.

Pasi said his organisation has exceeded its target of $818 million for the first quarter of this year by 2 percent but warned that with the shrinkage of the economy, the revenue base might further dwindle.

“We have exceeded the target by two percent notwithstanding the state of the economy,” said the Zimra chief.

“Things are not well out there and we have predicted that until and unless we can have some inflow of some revenue into the economy, we may be heading for a serious shrinkage of revenue.”

Pasi, who described the achievement as a miracle, said he has proposed to the finance ministry expansion of the tax pool by levying charges on accounts held offshore by banks.

“We realised that more is being kept outside by banks than is required to meet international obligations,” he said.

He went on to say the absence of stringent conditions on the movement of cash across the country’s borders was among the key drivers of the current liquidity crunch.

“Currently, we have a limit of $10 000 per person per trip,” he said, “This means that one can pass through for example, Beitbridge Border Post as many times as possible and that’s how money is taken out of the country.”

Pasi wants the limit revised further down, to protect the market.

Source : New Zimbabwe