Initiation of Criminal Investigations

Taxpayers are required to meet their tax obligations as prescribed by Law.  Where they fail to do so, ZIMRA has the powers to address that failure using a range of compliance improvement measures including prosecution. Apart from penalty for various defaults, the Income-tax Act also contains provisions for launching prosecution proceedings against the taxpayers for various offences. The Revenue Assurance Investigation Division carries out criminal investigations regarding alleged violations of the tax and customs laws.

Sources of Criminal Investigations for ZIMRA

When tax auditors in ZIMRA detect possible misdemeanours regarding tax and/or Customs issues from the information they have, the Authority initiates investigations. Information can be obtained from investigations that will be underway already or it can be received from the public or other sources. 

Preliminary Analysis and Investigation Approvals

A preliminary analysis is conducted on a possible criminal case and relevant approval is sought prior to the case being taken up as a criminal investigation. 

Conducting a Criminal Investigation

Upon the opening of an investigation, the case officer gathers the facts and evidence needed to establish the elements of criminal activity. The case officer conducts interviews of third party witnesses, carries out surveillance, reviews financial data and other related information.

The case officer works closely with the Zimbabwe Republic Police and National Prosecuting Authority during the criminal investigation process. 

Prosecution 

When the case officer files papers for prosecution, they will work with the prosecutor to prepare for trial. The case officer can be called as state witness to testify at the trial and support the state`s case against the alleged offender.

Conviction

The desirable result of a Criminal Investigation prosecution recommendation is to get a conviction – through either by a guilty verdict or plea. The prosecuting and arraignment of offenders is meant to deter would be tax offenders, increase voluntary compliance and revenue flows and nip tax fraud in the bud.

Advance rulings are a trade facilitation tool and Section 34D of the Revenue Authority Act [Chapter 23.11} provides for the issuance of advance tax rulings. Section 87 of the Customs and Excise Act provides for classification of goods for customs purposes.

Advance tariff classification rulings, can be requested by importers and other relevant parties regarding their advance importation. This request is done through an application in writing to the Commissioner Customs and Excise.

Requirements

1. Applicant to complete a Request for Classification Decision Form (RCD)

• Applicant (Name & Address)
• Description of goods (composition, intended use)
• Classification envisaged by applicant
• Basis for envisaged classification

1. Samples, photographs, plans, catalogues or other documents, if necessary
2. State whether the goods are the subject of verification process, or any appeal

The advance ruling is issued in writing and binding to ZIMRA. The ruling is applied only with respect to goods described, and the ruling will not be honored if the good differs from that described in the ruling; if applicable laws and regulations are amended after the issuance of the ruling; or if there is an error in application of laws and regulations. The ruling may be cancelled if it was given on the basis of incorrect or incomplete details provided by the applicant.

Benefits of Advance Rulings

• efficient revenue collection through uniform application of the Harmonized System
• Proven trade facilitation tool that harmonise and expedite clearance processes.
• promote consistency, certainty, predictability as traders can plan adequately for their  importations thus enabling the business to make informed decisions

The issuance of an advance ruling may be declined or postponed where:

• The applicant fails to provide additional information required;
• A good is the subject of a classification process, or any instance of review of appeal

Importers and the like may also make an inquiry orally (by phone or at a customs office counter) or by emails. However, please be guided that any response to such oral/email inquiry is given only for the reference purpose for traders.

Download RCD Form tarriff classification 

Withholding of Value Added Tax was introduced with effect from 1 January 2017 and some registered operators have since being appointed as VAT Withholding Tax agents. The VAT Witholding Tax agents’ role is to withhold a portion of the VAT when paying their suppliers who are registered for VAT.

What is Value Added Withholding Tax?

It is a tax withheld by appointed agents when they pay their suppliers for the acquisition of taxable goods and services. A list of appointed agents is available on the ZIMRA website.

From whom should the tax be withheld?

VAT withholding agents should withhold from their suppliers who are registered for VAT. VAT withholding tax shall be withheld on payments of standard rated supplies. No VAT shall be withheld on payment for the supply of exempt and zero-rated supplies.

What is the rate of Value Added Withholding tax?

The rate of Value Added withholding tax shall be 1/3 of the output tax (VAT charged). In cases where payment of the supply is made in instalments, VAT shall be withheld on the output tax on each instalment

What is the supplier supposed to do?

The supplier must:

• Receive a VAT withholding tax certificate from the agent.
• Claim the VAT withheld as a credit on submission of VAT returns.
• Attach a schedule of amounts withheld by various agents to the VAT return.
• Keep the tax certificates obtained from withholding agents for a period of six years

NB: The VAT withholding tax deducted will reduce the amount of VAT payable during the tax period or increase the refundable amount.

Should a supplier supply less goods and or services because VAT has been withheld?

The amount withheld is VAT and it is remitted to Zimra by the agent. The supplier claims the tax as a credit on the VAT return which means the tax is an advance payment. Therefore the suppliers is not supposed to supply less goods or services following the withholding of the tax.

1. Zimra Integrity Management updates

A total of 176 ZIMRA employees have been suspended/dismissed since 2016.

2. Officers affected by Customs Clearance Certificates project

Data capturing clerks have the highest impact on vehicles that are imported into the country without payment of duty. They are now a corruption hot spot.

Project Impact

• 485 vehicles were identified as having been fraudulently registered. 433 of these were finally published in the print media calling for owners to report to ZIMRA for verification of the clearance details. A total of 52 vehicles out of the 485 had data capturing errors that were verified and found to have been correctly cleared. One hundred and eight (108) vehicles have been seized to date.
• There is huge impact on revenue collection. It is estimated that ZWL 70 000 000 will be recovered directly from this project.
• The project is expected to improve compliance which will be a major factor in the long term.
• Impounded cars

       https://www.thezimbabwemail.com/car-renew/zacc-zimra-impound-over-100-vehicles/

• 20 ZIMRA officers were arrested and are appearing before the courts

Hot News

• Ginimbi

       https://iharare.com/ginimbi-ordered-to-pay-58k-more-for-new-bently-continental-gt/

• Zimra official denied bail:

A 29-YEAR-OLD Zimbabwe Revenue Authority (Zimra) official accused of defrauding his employer of US$433 000 and $1,5 million while stationed at Plumtree Border Post was yesterday denied bail by a Bulawayo magistrate on the grounds that he was a flight risk.

       https://www.zimbabwesituation.com/news/zimra-official-denied-bail/

• Zimra officer on the run

Crime Reporter

POLICE have launched a manhunt for a Zimbabwe Revenue Authority (Zimra) officer Sekelwe Maphosa who is part of a gang that defrauded the authority of millions of dollars in a fraudulent vehicle clearance scandal at Plumtree Border Post.

Two Zimra officers, Teeklar Ndlovu (55) and Norest Ushe (29), have since been arrested for fraudulently clearing 50 vehicles without charging import duty. Maphosa is still at large and the police are now looking for her.

https://www.herald.co.zw/zimra-officer-on-the-run/

https://nehandaradio.com/2019/12/15/zimra-official-who-was-on-the-run-over-usd400k-f

Zimra Clerk Charged With 183 Counts of Fraud

A ZIMRA data capture clerk, Herry Phiri has resigned after he was charged with 183 counts of fraud. He allegedly forged customs clearance certificates to evade duty. Phiri appeared before Beitbridge Resident Magistrate, Langton Mukwengi and was granted $5 000 bail and ordered to report three times per week at Beitbridge Police. He was remanded to a later day for continuation of trial.

https://www.zimeye.net/2019/12/05/zimra-clerk-charged-with-183-counts-of-fraud/

3. Monthly Corruption Trend

Updates inserted by:

Tapiwa Manyika (CPO, DDO)

Chief Loss Control Manager