THE Zimbabwe Revenue Authority (Zimra) failed to receipt deposits from clients worth close to ZW$2 billion (about US$3 million) last year, according to the Auditor-General Mildred Chiri.
This is contained in the Auditor-General report for the financial year ended December 31 2021 on state-owned enterprises and parastatals submitted to Parliament this week.
The report highlighted that entities continued to ignore the Auditor-General, including failing to submit their financial statements for audits.
There were 53 entities that had not yet submitted financial statements for audit when the report was prepared while four others had accounts in arrears of more than three years.
On Zimra, Chiri, on the basis of qualified opinion, reported flows in unclassified deposits, e-service platform, temporary import permits and Value Added Tax (VAT) returns.
“Included in the revenue is ZW$1,6 billion deposited by clients but not receipted and allocated to any tax head by the end of December 2021,” she said.
“The authority attributed the anomaly to insufficient payee details for online banking payments. The outstanding revenue return was not adjusted for these payments.”
Chiri noted that due to this anomaly, some clients continued to accumulate penalties and interest for outstanding amounts.
“These amounts distort the revenue return and outstanding revenue return. The authority should consider further engagements with clients and banks to ensure these unclassified receipts are subsequently classified and reported appropriately,” she said.
The audit report also indicated that Zimra’s e-service was not performing as expected since 2016, leading to some business partners with outstanding returns not being charged civil penalties.
“For instance, between January 1 to March 15 2021, the system could not handle and process all the 364 011 returns,” she said.
Chiri said although Zimra had put alternative means of submitting returns through emails and then capturing them manually into the system, the clients’ accounts were in credit of 500% due to returns not yet captured by December 31 last year.
She said this had a risk or implication of producing misstatements of outstanding revenue, adding that Zimra should establish the cause of the challenges to ensure the proposed new system addresses them.
Chiri said there were 45 700 Temporary Importers Permits (TIPs) issued to vehicles entering Zimbabwe and were expected to be acquitted before they expire on December 31 last year compared to 34 008 in 2020.
“These electronic and manual Temporary Importers Permits had not been acquitted despite the fact that they had expired. Some of the entries date back to the year 2013. Some of the vehicles may have been localised as they are long outstanding, compromising potential duty payable,” she said.
This, according to the report, could culminate in a loss of revenue through the unprocedural conversion of TIPs into local registration.
Chiri recommended that Zimra should consider reviewing its internal procedures on TIP follow-ups while management should also make efforts to engage other stakeholder entities to help trace all outstanding TIPs before write-offs.
Meanwhile, Chiri in the report, said governance issues were the most outstanding issues.
“Out of 114 issues I am reporting, 81 relate to governance issues, while 33 relate to the management of assets, revenue collection, employment costs, and procurement,” Chiri said.
She further noted that at the time of the production of the report, in relation to the 2019, 2020, and 2021 financial years, 77 audits had been completed while 100 audits were in progress.
“Fifty-three entities had not yet submitted financial statements for audit. Amongst those in arrears were four entities whose accounts were in arrears of more than three years,” Chiri said.
She also highlighted that most entities were yet to align their practices and policies with the provisions of the law.
Source link : https://www.newsday.co.zw/theindependent/business-digest/article/200000923/zimra-fails-to-receipt-zw16bn
Publish date : 2022-09-23 12:23:55