DELTA Beverages bosses are facing a Parliamentary grilling over beer levy remittances to local authorities amid fears some were capitalising on lack of proper accounting systems to unlawfully under-remit the levy, it has emerged.
The beer brewing company bosses have since been summoned to appear before the Public Accounts Committee sub-committee on Local Authorities toanswer to their failure to remit the funds as exposed by Auditor-General Mildred Chiri’s 2020 report.
Sub-committee chairperson Dexter Nduna, who is also Chegutu West MP, said the Delta management will soon testify.
“We have just come in from Kariba and it shocking what the Auditor-General has unearthed in the 2020 report,” Nduna told The NewsHawks this week.
According to the 2020 Auditor-General’s report on Local Authorities, several councils were in the dark on the remittances and whether the amount they were receiving was the actual amount they should be getting.
“Strikingly, all the Local Authorities were not accurately accounting for beer levies deposited in their accounts by brewers as there were no supporting sales schedules as required by the provisions of the Traditional Beer Act [Chapter 14:24],” Auditor-General Mildred Chiri noted in her report.
For Gweru, it emerged council was not getting statements from the breweries operating in the city.
The Traditional Beer Act [Chapter 14:24] stipulates that a 3% levy be paid by breweries on the basis of sales figures.
Chiri failed to therefore ascertain the accuracy and completeness of revenue from the beer levy, with the risk of misstatement.
In Kadoma, Chiri said there was no basis for the beer levy remitted by the breweries, with the management saying returns were not being submitted for verification to support the beer levy remitted by the commercial brewers.
She said there was high risk of financial loss due to understatement of beer sales and recommended that management ensure that commercial brewers submit returns for beer sales and remit beer levy according to the law.
In Chiredzi, the Auditor-General’s report said several communications and visits were done to Delta to verify the authenticity of the 3% opaque beer payments to council. The information was yet to be availed, according to Chiri. Nduna said there was no proper accounting system in remitting beer levy to local authorities.
“We have companies like Delta who are supposed to pay beer levy to local authorities. They just pay whatever they think they can pay. There is no accounting system and proper record for why they are paying whatever it is they are paying to the local authorities,” Nduna said.
“According to the law, they are supposed to pay a certain percentage of beer levy annually to local authorities but a company listed and has books like Delta, it is a shame that they are behaving like a proverbial bull in a China shop and it can only mean one thing: the money they are supposed to give to the local authorities, individuals at Delta are pocketing it and we are going to bring in the bosses there, the top management and they need to answer to issues of beer levy to all the 92 local authorities.”
Nduna said the Kariba meeting was to unpack what transpired in the 2020 Auditor-General’s report regarding local authorities.
“You find that Delta did not remit the amount or if they did they did without any proper record and we will be asking them to show us records for the past 10 years, so we will bring in the management and accounting officers and I am sure somebody will be answering to corruption charges,” he said.