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Robert Mugabe's palatial Blue Roof mansion in Borrowdale, Harare, Zimbabwe

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President’s Office used as tax avoidance conduit by bigwigs

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ZIMBABWE’S Office of the President and Cabinet – the highest office in the land – has been used to evade and avoid paying taxes, especially customs duty, by politically connected companies and individuals.

Bridget Mananavire

The tax evasion activities – in which some companies or individuals evaded or avoid paying their tax liabilities; in this case customs duty – was rampant under the late President Robert Mugabe’s rule and still continue under his successor President Emmerson Mnangagwa, documents seen by The NewsHawks show.

The documents suggest criminal abuse of office.

Abuse of office, in terms of section 174 (1)(a) of the Criminal Law (Codification and Reform Act) (chapter 9:23), is a criminal offence in Zimbabwe. 

Many top officials, including former ministers, have been charged for it. Former Vice-President Phelekezela Mphoko is facing charges of criminal abuse of office.  Ex-Energy minister Samuel Undenge has been jailed over similar charges intertwined with corruption.

The Mugabe family and their businesses — among them Gushungo Diary, Grace Mugabe Children’s Home, Alpha and Omega Holdings and Mwenewazvo Pivot—enjoyed illegal tax exemptions, including import duty and Value Added Tax, during the late president’s lengthy tenure.

These disclosures, which raise questions about abuse of office and privileges, come at a time when incarcerated former principal director of state residences in Mnangagwa’s office, Douglas Tapfuma, revealed during his trial in March that government and Zanu PF officials have been using letters of duty-free authorisation from the President’s office to import their goods and vehicles. 

Evading or avoiding paying duty prejudices the state of the much-needed tax revenues to fund its operations and development activities. 

The twin evils of tax evasion and avoidance have bedevilled Zimbabwe since 1980.

Mugabe’s family business Gushungo Holdings and its subsidiaries routinely evaded and avoided paying tax, while benefitting from tax-free facilities during his long time in power. Their workers also imported goods and groceries duty free. This sort of abuse of office is still going on under Mnangagwa’s government.

Outgoing Chief secretary to the President and Cabinet, Misheck Sibanda, now retiring after decades in public service as announced by government last month, last year granted a duty-free certificate for a container full of household goods and groceries under the pretext that the supplies were for exclusive use by government in terms of non-duty payment.

The tax evasion or avoidance corrupt practice has been there for a long time under Mugabe and persists under Mnangagwa, allowing high profile individuals and those who are connected to import goods, including luxury commodities and cars, duty free. 

State employees, some of whom had travelled with the former first family to Singapore before Mugabe’s death on 6 September 2019, took advantage of the President’s office and the family’s name as well as name-dropping to import goods for personal without paying duty.

In a 2 August 2019 letter to a Zimra manager at Forbes Border Post, Sibanda requested clearance of goods in a freight container without paying duty. 

The goods, worth US$26 060.45, were destined for the Blue Roof mansion – the Mugabe family’s private residence just outside Borrowdale Brooke. 

Duty for the goods was supposed to be ZW$112 450.93

“The above subject matter refers. The office (of President and Cabinet) has authorised Mr M Muchimwe ID:63… to clear the above consignment using a duty-free certificate no. GA/59/1658. May you kindly facilitate the clearance and safe passage to the final destination. Thank you in advance,” Sibanda wrote.

In a confidential letter to the director of Zimra and collector of customs, Sibanda said the goods were for use by the state and any leviable duty would be borne directly by the government.

“I hereby certify that the various goods, which were purchased from Singapore on Bill of Lading no. 583161974 are supplies for the exclusive use of government in terms of non-duty paid,” Sibanda wrote.

Verification has shown that the goods were for individual and not government use.

The container came through Beira, Mozambique, and the invoice number was 5043156. The container had “toilet rolls, kitchen towels, olive oil, Sta-Soft, rice, blankets, steamers, breeze, stool, solar batteries, rice cookers, wheelchairs, rice cookers, washing powder, refrigerators, cooking oil and water pump”.

It also had “toasters, bath soap, vacuum cleaners, hosepipes, toiletries, car parts, generators, car service kits, televisions, tents, detergents, Canon printers, washing machines, sewing machines, microwaves, bed linen, bond paper, tyres, stationery, pressure cookers as well as chip fryers”.

There are cases of Zimra officers arrested for corruption and bribery in relation to duty non-payment of duty.

Tapfuma was convicted in June for criminal abuse of office and avoiding paying duty on eight personal cars.

In his defence, Tapfuma said there was nothing amiss about his actions as the non-payment of duty is a practice that has existed for a long time. He said it is common for government officials to import personal goods using the duty-free certificates from the Office of the President and Cabinet.

In several letters to Mugabe, the then Gushungo Holdings general manager, Stanley Nhari, would write to him requesting tax exemptions for private gain.   

One such letter, dated letter December 12, 2014, reads: “Your Excellency, we hereby submit a request for VAT exemptions for the following materials and services required at the Grace Mugabe Children’s Foundation Home and Gushungo Dairy Farm as follows”. 

The letter goes on to list steel, timber and other building material as some of the goods that should not pay duty.

In another letter, written in February 2014, Nhari also applied for VAT exemption for building material for Mwenewazvo Estate, Gushungo Dairy as well as the Mugabe family’s Blue Roof mansion in Harare’s Borrowdale suburb.

Contacted for comment, Sibanda, whose signature is on the duty-free certificates, referred The NewsHawks to Zimra and the deputy chief secretary for Administration and Finance in the office of the President and Cabinet Martin Rushwaya.

“This is to do with the office of the President. When I do that it will be for a particular purpose, so it is better you check with the accounting officer, Rushwaya,” Sibanda said.

While the then first Lady Grace Mugabe was benefitting from tax and import duty exemptions, she was also receiving goods from Zimra to donate at her political rallies.

The goods would have been confiscated from importers who would have failed to pay duty or tried to smuggle them into the country.

A paper done by University of Venda researcher Tatenda Dalu and others, titled The impact of tax evasion and avoidance on the economy: A case of Harare, Zimbabwe, says: 

“The exploration of tax evasion and avoidance is of paramount importance to economic development. One of the greatest problems facing the Zimbabwe tax system is the problem of tax evasion and tax avoidance. A country facing an increasing amount of tax evasion and tax avoidance is likely to exhibit a low productive investment mix, this would mean low economic growth and public enterprises would also be affected”.

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