Uncollected duties, ghost imports, revenue leakage...

Uncollected duties, ghost imports, revenue leakages haunt ZIMRA

Oscar J Jeke

Zim Now Reporter

The Zimbabwe Revenue Authority, the country’s chief tax collector, has come under intense scrutiny after the Auditor-General’s 2024 report uncovered sweeping irregularities in customs administration, uncollected taxes, and systemic weaknesses in revenue management, casting doubt on the integrity of Zimbabwe’s fiscal system and raising alarms about billions in potential revenue loss.

In her assessments, the Auditor-General, Rheah Kujinga, issued qualified opinions on three critical ZIMRA submissions the Revenue Return, Outstanding Revenue Return, and Exchequer Trust financial statements, citing gross non-compliance with tax legislation, long-standing data irregularities, and failure to enforce collection mechanisms for deferred Value Added Tax, Temporary Import Permits, and Removal in Transit consignments.

“The revenue return excluded penalties and interest on outstanding taxes in respect of deferred VAT… I could not establish the completeness of revenue disclosed,” reads a key excerpt from the report, warning that the figures presented may significantly understate what the tax authority is owed.

Among the most shocking revelations is ZIMRA’s handling of Temporary Import Permits. Over 37,800 TIPs, some dating back years, remained “not acquitted” as of December 31, 2024, meaning no formal exit records exist for these vehicles. In the absence of proof that the vehicles left Zimbabwe, the Auditor-General warned that many could have been illegally localized and absorbed into the domestic fleet without paying the requisite import duties.

Similarly, unacquitted Removal in Transit entries, involving goods in transit through Zimbabwe amounted to ZWG12.2 million, with suspicion that many of the goods were offloaded locally and never reached their intended destinations. The audit notes that duty payable on these transactions could not be accurately determined due to lack of enforcement and poor record-keeping.

Also of concern are customs debts linked to pre-cleared entries, where importers submitted documentation and secured clearance but never completed the actual importation. These dormant entries, amounting to ZWG210.9 million and USD4 million, remain lodged indefinitely in ZIMRA’s system and were not written off or reclassified, violating basic accounting norms and overstating the Authority’s assets. “The custom debt included amounts which may not be collectible and this was not adjusted accordingly,” the report noted.

This is not the first time ZIMRA has been flagged for similar concerns. The 2023 Auditor-General’s report also issued modified opinions for the same reasons, indicating persistent failure to implement corrective measures or enforce policy changes over time.

The Revenue Return for 2024 was found to have excluded penalties and interest on unpaid deferred VAT, contrary to section 39 of the Value Added Tax Act [Chapter 23:12], which mandates the imposition of such charges. The omission raises further questions about the authority’s seriousness in enforcing compliance, especially at a time when government is under pressure to widen its revenue base.

Coupled with uncollected wealth tax, still pending legislation, and unresolved gratuity payment policy gaps, the cumulative effect of ZIMRA’s lapses poses a real threat to the nation’s fiscal sustainability.

Operational lapses were also evident in infrastructure and security. The audit found rodent-infested warehouses in one regional office, putting seized goods at risk of spoilage. Impounded trucks parked in undesignated areas due to lack of towing equipment or proper car pounds remain exposed to unauthorized clearance.

Moreover, the report flagged ZIMRA’s underutilization of its capital budget. Only 37% of allocated funds for capital expenditure were used in 2024, hampering key projects such as border post upgrades and CCTV installations. “The CCTV system is outdated and lacks a maintenance contract,” the report said, noting that some cameras were uncleaned or non-functional, exposing critical inspection areas to blind spots.

Despite several engagements with the Ministry of Finance and Parliament’s Public Accounts Committee in previous years, the report shows that ZIMRA has yet to fully implement long-standing recommendations. Deferred penalties, unacquitted TIPs, and unadjusted debts from as far back as 2020 suggest a culture of inertia and poor internal governance.

The Auditor-General’s analysis cuts deeper this year, warning that “material uncertainties exist that may cast significant doubt on the Authority’s ability to present accurate and complete financial data.”