ZCDC Settles Outstanding Taxes After US$1.73 Million Penalty
The Zimbabwe Consolidated Diamond Company (ZCDC) was hit with a US$1.73 million penalty for delays in settling its tax obligations to the Zimbabwe Revenue Authority (ZIMRA).
By Patricia Rwafa
The company blamed cash flow problems for the late payments but has since reached an agreement with ZIMRA and obtained a tax clearance certificate for 2023.
Findings by Acting Auditor-General Rheah Kujinga in her Value for Money Audit Report on ZCDC audits for the year ending December 31, 2022, showed the big miner veered into ZIMRA’s crosshairs after failing to submit Transfer Pricing Returns, which were due on April 30, 2022.
According to the audit, ZCDC further fuelled ZIMRA’s pursuit of delinquency after failing to pay Value Added Tax and Income Tax on time.
Official reports showed this week that ZCDC was slapped with US$1.73 million in penalties after delaying the remittance of taxes two years ago.
Acting Auditor-General Rheah Kujinga said,
“The company’s bank accounts were garnished and the charge amounted to US$1.73 million and ZW$920 million for non-compliance. The company was not generating enough revenue during the year under review. As a result, it was not remitting Value Added Tax and Income Tax on time.”
ZCDC management confirmed the firm was navigating through a dire cash-flow crisis during the period but reached out to ZIMRA to present its case.
“The late payment of taxes during the year was mainly due to cash-flow challenges, which the company faced in 2022,” management said in response to the AG’s report. “However, during this period, management was engaging ZIMRA on a regular basis, through official payment plans for overdue taxes.”
The report noted that as a result of these engagements, the company was issued a tax clearance certificate for the full year of 2023.