Packers International (Private) Limited, which owns Chicken Slice, Pizza Slice and Creamy Slice filed a Constitutional Court application recently after it was being compelled to settle a contested hefty $24 million debt in tax arrears by the Zimbabwe Revenue Authority (Zimra).
It is challenging sections of the Value Added Tax Act that empower Zimra to garnish companies’ bank accounts without a court order and to unilaterally recover tax owing by collecting money from the firms’ debtors as well as the constitutionality of the “pay now, argue later” piece of legislation that compels firms to continue paying tax despite having challenged the figures owing in a court of law.
In 2014, Packers International won a High Court case that ordered Zimra to remove a garnish order that they had imposed on the former’s bank accounts, to wait 7 days to impose a new order and to desist from “unlawfully interfere with applicant’s business operations and its day to day activities, including the placing of its officers or agents at applicant’s business premises.” While that case was won, it looks like Zimra is still going ahead to get its moneies, not only because Government has huge obligations such as a bonus to pay, but also because their rough like that.
The matter boils down to Packers and Zimra failing to agree on what the latter is owed in tax obligations for the period September 2010 to December 2013. (Most probably, last year’s figures will also be added to that as they became due in April 2015). This was for unpaid income tax, outstanding Pay As You Earn and unpaid Valued Added Tax, totally $24,489,616. Packers lodged an appeal with Zimra after the revenue authority rejected their initial filling and while they have taken the matter up with the Fiscal Appeal Court, Zimra went ahead and instructed Packers bankers (FBC) to forward the above mentioned funds to it.
According to Packers International’s lawyers Section 48 of VAT Act denies the firms right to equality before the law and equal protection of the law as enshrined under Section 56 (1) of the Constitution of Zimbabwe. Case in point; Zimra has the right and power to access one’s bank account and take money ‘owed to them’, while such a right does not extend to Packers when dealing with their creditors. “Indeed, this exposes the truth that applicant and respondents are not equal before the law and that they do not enjoy an equal right to benefit and to be protected by the law,” reads the application.
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