Just part of the paperwork necessary to import the coir pith essential to my business
It’s not something I look forward to but the coir pith on which my nursery depends for growing seedlings is essential for a good product. Yes, another substrate – composted pine bark – is available locally but last time I tried it some 20% of my seedlings died from the disease it carried. So about once a year I just have to grit my teeth and jump through the bureaucratic hoops. To be fair it IS becoming a bit easier as more of the government agencies involved get online and organized.
First off is the Agricultural Marketing Authority. I have no idea what they do but membership is essential and nothing else is achievable without it. Fortunately it’s doable online. Then it was on to the National Biotechnology Authority to get a permit that acknowledged the import was free of GMOs. The Indian supplier had given me a certificate stating as much and though it didn’t look very authoritative to me, it was sufficient and upon receipt of the required payment the local certificate was duly issued.
I have done the Ministry of Agriculture for the importation permits before and found it beyond tedious so sent Fabian, one of my senior staff, down there with some smaller US dollar note and instructions to “do whatever it takes” to get the first certificate. It cost him five dollars to put in the application whilst the official concerned was “on lunch break” and then all I could do was wait.
Fortunately the container was being delayed en route from Sri Lanka. I have no idea why it had to go via Colombo but I guess getting a full cargo of containers to warrant a ship going into the port of Beira in Mozambique takes some organizing. That was just as well as the first permit took two weeks, the date stamp indicated it had been sitting on an office desk for one of those weeks, and the second permit took another 10 days. That also required a sweetener of a few dollars.
By this stage I’d already paid the port and transport fees, all US dollars, and the race was on to get the local documentation to the border post near Mutare in the east of Zimbabwe before the truck from Beira got there. If we were late demurrage would be charged and I’d experienced that to my cost before. Fortunately my local shipping agent seems to know a lot of people and he got the money there just in time.
Then it was just a case of waiting for the truck to arrive and organizing a forklift to offload the pallets. It was three weeks late and in the interim I’d had to buy two pallets from another local supplier who’d marked up his prices 100% (he vehemently denied this even when I told him I new what it cost) but at least it’s over for about another year.
Now that the final accounts are in I can see that the costs were close to last year. The total for 24 tonnes of coir was US$19,650 which works out to 81.8c per kg. For some strange reason my bank needed to pay for the coir in Euros, I have no idea why but I do know that payment had to go through a South African bank. The rest was all payable in US dollars, none of the Zimbabwean kind thank you very much.
Yes, Zimbabwe is still trying to get its own currency up and running. It’s called the ZiG which is not the name of a cartoon character’s best buddy but is short for “Zimbabwe Gold”. It’s apparently linked to gold bullion of which the Reserve Bank is holding. Nobody is actually sure if this is the case but the official rate is around 13.8 to the US dollar.
When the ZiG was first introduced the obvious happened; currency traders spotted a good thing and the rate soon began to run. The government got tough and threatened a US$10,000 fine for any company or person not using the official rate – by law you have to accept either the ZiG or the US dollar if that’s how a customer wants to pay, the one exception being fuel traders who are not obliged to accept ZiG. Fortunately for my business most customers are uninterested in using local currency and choose to pay in US dollars, usually using cash. The local currency received has been entirely electronic – I’m not sure if this is by design – and I have yet to see any local notes. It is certainly not difficult to get US dollar notes out of my local bank and even small denominations are often brand new and in their 100 notes wrappers.
The country’s roads are in a disastrous state at the moment, bearing witness to years of neglect, but there’s a regional conference of the SADC (Southern African Development Community) in August so there’s been an orgy of road repair in Harare during the last few months. Construction teams have been called back to Harare from the outlying projects to concentrate on the local roads. Chaos has ensued as roads are closed and heavy traffic routed through the suburbs.
Some actions are unsurprising, others beggar belief. People living along the main route to the new Chinese-built parliament house where it’s all going to happen have been offered free water, delivered by tanker, to help make their gardens look pretty for visiting dignitaries.
The new dual carriageway to the parliament is being lined with kerb stones that make sure that there is nowhere to pull off the road if one has a breakdown. A local farmer, who lives on the route, pointed this out to one of the construction teams and was assured that it was a temporary arrangement and all the kerb stones would be removed after the conference. We’ll see.
A new bridge has gone in over a small river. They haven’t finished casting all the concrete and I’m told it takes a month to cure but the conference is in less than a month. Interesting.
An obvious question is where has the government suddenly found all the money? Are the construction companies actually being paid and what currency are they using? A friend is heavily involved in the landscaping of the new parliament and Marianne tells me she is being paid in US dollars and is doing quite well from it but rumours abound as to whether the others involved have been paid. I have heard that one company was owed some US$200 million which seems a bit much but many years ago I was told that a normal road costs US$ 1 million per kilometer to construct so perhaps it’s possible. Whatever the truth is you can bet the government will do whatever it takes to get the roads done and put up a paper-thin facade for the visiting dignitaries.
The nations hospitals would certainly like a bit of money themselves; currently several of the bigger ones are owed in excess of ZiG11 billion – a lot of money in any currency.
Zimbabwe Absurdity 
Taxed if you do, taxed if you don’t
26 08 2023It had to be a mistake, I couldn’t possibly owe the tax department (ZIMRA – Zimbabwe Revenue Authority) that amount. Even if I converted it to US dollars it would amount to an impossible figure – about 17,500 at the unofficial rate and 23,000 at the bank rate. I checked the email address – it was from a person with whom I’ve corresponded over the years. Then there was the wording; FINAL DEMAND. Where were the other demands? I did what any sensible person would have done and contacted my bookkeeper in a state of panic.
Alison was more than a bit puzzled but told me she couldn’t do anything without seeing how they’d got the figures. “Your are entitled to see what’s going on” she said. “Ask them for the ledger”
The ledger was duly sent and the waters immediately became a lot murkier. It stated the figures were in US dollars and the numbers, if the currency was US dollars, were impossible. I sent it on to Alison. It was a while before she came back to me by which time my imagination had run riot. What if I really did owe 105 million dollars? I would have to buy it on the open market with my US dollars and would be left with no operating capital and nothing with which to pay wages. The company would be unlikely to survive.
Alison assured me that the figures on the ledger were Zimbabwe dollars and I probably did owe the 3,835,807 listed. She had no idea where the 105 million came from. “Ask them” she said. So I did.
The reply was abrupt; the 105 million was to be ignored (RTGS is another way of saying Zimbabwe dollars). The amount on the ledger was also incorrect as it didn’t account for some US$550 that I’d paid in presumptive tax (they are called Quarterly Payment Due or just QPD) which would have reduced the amount owed close to zero.
I speculated to Marianne that it was all just a bit of psychological bullying to get me to pay attention to the outstanding amount, then two days ago I bumped into Gary whose wife had had a strikingly similar experience.
Gary works for a seed company that occasionally uses my nursery to grow seedlings for various trials. They have a trial on ART Farm which is a neighbour to my nursery and I sometimes use it access my nursery so as to avoid the appalling direct road and take in a bit of soothing farm scenery on the way. Gary was having a look at one of their trials near the road so I stopped to chat.
We discussed various things then I related my experience with the tax authority. He said that Clare, his wife who works as a bookkeeper for a local church, had received a final letter of demand for payment from ZIMRA for an impossible amount about three months ago. She replied that as a church they were not liable for tax and any money made was given away to various charities and nothing more was heard. He agreed with me that as the government was desperate for money it was likely endorsing ZIMRA’s intimidation tactics to get in whatever money they could, maybe they were even giving a commission.
On getting to work I related the story to my senior foremen. They were decidedly cynical. “They are all on the take” opined Chingedzerai. “Yes”, added Fabian, “they see the rest of the government officials stealing and think that they should have some of the pie too. They see what they can bully you into paying and then split the extra between themselves”. It was obvious that they thought I was being naïve.
Marianne had been doing some questioning of her own and posted my problem on the local community WhatsApp group. Someone had responded with a name and phone number of a senior official at ZIMRA whom he thought would be able to help. I gave him a call and related my problem and asked if it was official ZIMRA policy to send out threatening demands based on nothing much at all. His indifference was striking; I should send him a copy of all the correspondence and documents and he’d forward it to the relevant manager. I duly sent him the copies but I am not expecting a reply.
It’s no secret that Zimbabwe is in deep financial trouble. Mismanagement, corruption and incompetence have seen our GDP plunge after the Mnangagwa government took power in a coup back in 2017.
At the time it was welcomed by the majority of the population who were relieved to be rid of the much hated and feared Mugabe regime but it was not long before the new government of E D Mnangagwa revealed its true colours of repression and corruption. Chingedzerai reminded me that the current administration has never bothered to investigate the estimated US$15 billion worth of diamonds that went unaccounted for from the Chiadzwa diamond fields in the east of the country in the latter part of the Mugabe era. More recently there was the gold smuggling exposé by al Jazeera that showed how top Zimbabwean officials were, with the highest approval, smuggling gold out of Zimbabwe and laundering the resulting cash. Indeed, for a country that is struggling financially, there is an eye-opening amount of property development around town. In the past this would have attracted the attention of ZIMRA who would have demanded to see the accounts of owners of expensive properties and made to account for the development. Now it’s easier, and more personally profitable, to send out threatening letters.
I paid wages on Tuesday. We chose the date years ago when getting cash from the bank at the end of the month meant enduring long queues and not getting the desired breakdown. Chingedzerai had heard the income tax limits had been increased and asked me to check on the internet before he entered the attendance and overtime figures on the computer. I was fairly sure it was only the Zimbabwe dollar tables that had changed but checked on the US dollar tables anyway (I have been paying my staff in the latter currency since August last year).
In Zimbabwe salaries are taxed monthly and the system is known by its acronym PAYE; Pay As You Earn. The rates are iniquitous. Wages are taxed from US$100 per month upwards! Given that the minimum agricultural wage starts at US$60 before any of the required allowances, most of my staff are taxed. Some do get age exemptions but the rest of them have to endure.
Such is the government’s demand for money that it has taken to taxing money transfers at 2% per transfer. It goes without saying that most transactions are cash though it’s not always possible. The government used to tax cash withdrawals from banks but gave up when it became evident that people were simply not depositing cash in order to avoid paying the tax.
Given the high cost of living and taxation in Zimbabwe one would assume that the majority of the population would be keen for a change of government. Indeed, given that we had a general and presidential election on Wednesday, one could be forgiven for thinking it imminent. With the recent exception of Zambia, southern African is not known for changing its governments and Zimbabwe is not about to become an exception too.
My foremen and I were all in agreement on this; the incumbent ZANU-PF party, which has maintained its grip on power since 1980 by means mostly foul, will certainly cheat its way to victory; only the level of the fiddle is not known. So far it’s been “limited” to delaying delivering voting papers to polling stations in regions known to be opposition strongholds, sending voters to polling stations where they found they weren’t registered, making sure one couldn’t check the online registration database and of course blatant intimidation. Few, if any, believe the logistical problems to be anything but deliberate. We remain cynical.
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Tags: corruption, general election, tax, ZIMRA
Categories : Blogroll, Economics, Social commentary