The Sunday Mail
MOST companies collect their tax clearance certificates for the trading year in January.
It is during this time of year that Zimra offices are often characterised by long queues. Even though the service seems to be getting better, there is a feeling that a lot still needs to be done.
One does not help but wonder how it would feel if all the processes of applying and processing tax clearance certificates were to be done online, without necessarily warranting a visit to the Zimra offices.
A comparison with developed countries will suffice. It is indeed possible for the process to be paperless. The only fundamental question to consider is how this will happen.
Well, if anyone in the country can now send and receive money on their mobile phones from anywhere in the world, then indeed it is possible for every company in Zimbabwe to submit returns online and even receive monthly reconciliations via the same channel.
It seems like a huge task – but it isn’t. If you own or work for a small business and have to deal with paying taxes, you obviously know how inconvenient it can be to take time out to do the paperwork and then rush to the Zimra offices to submit your form and check for progress.
Such a laborious problem can be solved by filing and paying taxes online. It can only be hoped that this system will be in Zimbabwe soon.
What is clear is that there is bound to be savings made by ideally cutting back on fuel costs and also saving precious time.
According to the relevant US treasury website, www.eftps.gov – which takes payments from both businesses and individuals, “The Electronic Federal Tax Payment System (EFTPS) is one of the most successful federal government programmes undertaken in recent years.”
Similar programmes have been replicated elsewhere around the world.
There is a huge case for Zimra to adopt this system as it improves both revenue and efficiency.
Having that all-important paper trail, especially when it comes to handing precious dollars over to Government, is critical.
But, anticipating reticence to file and pay electronically, EFTPS has gone to great lengths to facilitate ease of use and both electronic and paper trails. “With EFTPS-OnLine,” the site says, “you receive an instant, printable confirmation number for your records after every payment instruction.
“Plus, the EFTPS-OnLine system gives you immediate access to your payment history for the previous 120 days.”
Well, the benefits touted by EFTPS focus on being in good company with many other businesses, cost and time savings, and control.
Already, many US businesses are already enrolled on this system because it saves on time and money.
Similarly, many businesses have found it handy because there are no more last minute trips to the bank or post office, lost cheques and missed deadlines.
An added assurance is that such type of systems are now secure.
Usually, online payments have disadvantages and risks of Internet fraud, but with the way the environment is changing, online will be one of the best methods to go.
For a fact, Zimra always has reconciliation nightmares with clients. Some clients do not even know how much they owe the tax man. On the other hand, with online systems one can access their account 24/7 and with time these reconciliation nightmares disappear. But there is still need for much debate, especially to consider how the system can be best suited to local systems and also what needs to be done before such systems are put in place.
Most, however, see the value of transacting online.
But Zimra needs to be commended for opening up several revenue channels with most banks. This indeed makes it easy to make payments.
Efforts to improve payments are clearly evident.
Auditors are often fascinated by how systems and organisations operate. It is high time we consider a system that links Zimra to the Deeds and Registry Office and even banks.
Experts believe that a survey that looks at companies that are registered as Deeds Office but are not registered with Zimra might reveal shocking results.
Even though most of the companies might be idle, there are some companies that may be making profits but do not meet their obligations to Zimra.
This is, however, debatable.
There are safeguard measures in place as blue-chip companies always request for a tax clearance certificate and VAT certificate as requirements before any job is awarded, but let us not ignore the fact that there are some who can circumvent and dodge the system.
While in Zimbabwe there might indeed be laws in place against committing tax fraud, the same regulations are arguably not aggressively enforced.
Maybe it is due to our current economic circumstances but there is need for stronger and tighter internal controls.
A strong but easy to use system can help alleviate some of the challenges we face on remitting payments and reconciliations.
The world is changing and we need to change with it. Before, people used to use several files for audit, but the introduction of audit software made work easier and more efficient.
Different systems work for different environments and let us implement the best system for our Zimbabwean companies.
Taurai Changwa is an articled accountant and ACCA finalist. He is managing director of SAFIC Consultancy. Changwa writes in his personal capacity and can be contacted at [email protected] or on Facebook page SAFIC Consultancy and WhatsApp number 0772374784.
