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A WHISTLE-blowers’ fund introduced by the Zimbabwe Revenue Authority (ZIMRA) as part of efforts to combat rampant corruption and economic crimes is being abused by the tax agency’s officials, the Financial Gazette has learnt. The damning revelations, which the authority could neither deny nor confirm puts ZIMRA in an invidious position as it has been at the forefront of fighting graft, which is destroying Zimbabwe’s social fabric.

Highly placed sources said ZIMRA commissioner-general, Gershem Pasi has been rattled by disclosures that some of his senior officials have been lining their pockets by abusing the whistle-blower fund and has hinted at tightening the administration of the kitty to plug the loopholes. Zimbabwe adopted comprehensive whistle-blower laws for tax purposes in 2001, and this is enshrined in the Zimbabwe Revenue Authority Act (Chapter 23:11) under Section 34B.

The law aims to promote an open culture with the highest standards of honesty and accountability where citizens can report any legitimate concerns in confidence. Under section 34B, subsection 2, the commissioner-general may, with the approval of the Finance Minister, award any person, not being an employee of the authority, or a near relative of an employee of the authority, a monetary reward for information provided or any measure taken which results in detection of smuggling or any illegal and underhand activities, and of the recovery of revenue which would otherwise have been lost.

The Act rewards whistle-blowers who tip-off on graft with 10 percent of the total tax revenue and penalties recovered as a result of whistle blowing information provided. But information gathered by the Financial Gazette indicates that some ZIMRA officials are giving insider information about their targets to third parties who will then blow the whistle as if they stumbled on the information themselves. Once they have been rewarded for lifting the lid on corruption and other malpractices, they will then share the spoils with the ZIMRA officials.

While no criminal cases relating to the abuse of the facility have been brought to public attention, several ZIMRA officers have been arrested, mostly at the country’s border posts, while trying to exert their influence to dupe government and those paying duties. In some cases, whistle-blowers have faced retribution at the workplace for exposing tax fraud although ZIMRA, which investigates whistle-blower complaints, has promised protection to any person who reports criminal offences and other violations that take place in organisations and encouraging them to report without fear of reprisal.

Millions of dollars are lost every year due to fraud and other white collar crimes and as a result government came up with a fund meant for informers who blow the whistle on offenders. The latest re-velations that ZIMRA officials are abusing the whistle-blower fund are certain to unsettle the Ministry of Finance under which the authority falls. The revelations were first made at a recent forum for parastatals, State enterprises and local authorities’ chief executive officers held in Harare.

“It has come to our attention that this whistle-blowing scheme has become an insider job,” said Alfred Marisa, acting director general of the government-controlled telecommunications regulator, the Postal and Telecommunications Regulatory Authority.

“ZIMRA officials breed corruption by abusing this fund. They discover some irregularities in some of the institutions they investigate but chose to be quiet about it only to send someone to expose the dishonesty or illegal activity happening in an organisation. The accomplices would then share the percentage entitlement,” said the official. He was immediately backed by several heads of the country’s State-run firms, who accused ZIMRA officials of abusing their privileged positions at the tax collector to access information and manipulate it to line their pockets.

ZIMRA commissioner for investigations and international affairs, Anna Mutombodzi, could neither confirn nor deny the alleged abuse of the fund. “It’s very difficult to say no or yes because we don’t have information but we try to discourage insider jobs,” said Mutombedzi.

“As ZIMRA, we take the malpractices very seriously and we have mechanisms in place to deal with such practices should (they) come to our attention. Sometimes we can only know through you. More protection will be given to anyone who blows the whistle on fraud or corruption in companies so let’s expose these officials so that whistle blowers’ fund is not abused,” she said.

ZIMRA exceeded its revenue target for the first quarter to March 31, 2014 by two percent, collecting US$834,6 million against a target of US$817,9 million, in spite of the shrinking economy. A significant drop in revenue is expected this year as the economic base continues to shrink with companies most likely to scale down operations due to the prevailing liquidity constraints.

Collections under individual tax amounted to US$193,3 million against a target of US$168 million, resulting in a positive variance of 15 percent. During the same period last year, US$172,7 million was realised which translates to a 12 percent growth in revenue. Corporate income tax amounted to US$104,7 million against a target of US$88 million, resulting in a positive variance of 19 percent. There was a 22 percent increase in revenue collections from companies from the US485,6 million that was collected during the same period last year.

Value Added Tax (VAT) on imports contributed 13 percent to total revenue and 51 percent to total VAT revenue. Collections amounted to US$107,8 million against a target of US$95 million. Customs duty collections amounted to US$71,2 million against a target of US$96,5 million, resulting in a negative variance of 26 percent. During the same period last year,US$89,5 million was collected resulting in a decline in revenue of 20 percent.

Source : Financial Gazette