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Treasury suspends the whistleblower monetary rewards

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FINANCE minister Mthuli Ncube has suspended the whistleblower monetary reward facility, amid scandals and corruption that have cost the Zimbabwe Revenue Authority (Zimra) millions of United States dollars.

BRIDGET MANANAVIRE

The NewsHawks this year ran a series of stories around the facility, which enabled whistleblowers to get 10% of the money recovered from tax evaders. The move by Ncube, however, is seen as a retrogressive step in the fight against corruption as the facility had been set up to minimise revenue loss to the fiscus through tax evasion and avoidance.

 Under the facility, an informer was entitled to a monetary reward for the provision of information that results in the detection of non-compliance to tax statutes, but in recent months Zimra had been neglecting paying informants, while the facility was prone to abuse. In his 2022 National Budget statement presented in Parliament last week, Ncube said the whistle-blower facility would now operate on the “goodwill of virtuous citizens”.

“Upon recovery of tax revenue, the informant is entitled to a monetary reward equivalent to 10% of recovered revenue. Whereas the facility has resulted in some recoveries of revenue, its effectiveness has, however, been undermined by unethical informants who have made whistleblowing a profession,” he said.

“These informants use any means necessary to claim the monetary reward in pursuit of self-enrichment. Due to the rampant abuse of the Whistle Blower Facility, coupled with the administrative burden and pressure placed on Zimra for payment of the monetary reward, I propose withdrawal of the 10% monetary reward with effect from 1 January 2022.”

“The Whistle Blower Facility will, however, continue to operate depending on the goodwill of virtuous citizens.”

Although some of the squabbles between whistle-blowers and the tax collector have been reported to the Zimbabwe Anti-Corruption Commission, the commission’s spokesperson told The NewsHawks that he was not aware of the facility and could not comment on its suspension.

“I cannot help you on that,” Zacc spokesperson John Makamure said.

One of the whistleblowing scandals involves the country’s leading whistleblower, Evans Kujinga, who has reported to Zimra over 300 companies as shown by latest records, for tax evasion and raked in millions of dollars in the process.

Kujinga has previously reported the tax collector to Zacc for corruption. Kujinga reported Zimra to Zacc over a number of cases due to unpaid commissions and an attempt by the tax collector’s top officials to rob him and other whistle-blowers of their dues.

Tax cases over which Kujinga reported Zimra to Zacc following disputes pertaining to non-payment include MetBank, BancABC Second Nominees, Fuels Africa, Traverse, NetOne, Jinan, Zimbabwe Sugar Sales, Second Nominees, Solid Ground, African Centuries, CABS and Delatfin (Pvt) Ltd, among many others.

According to insider information, massive corruption — which has dragged on for years — has been rocking the multi-million-dollar whistle-blower fund, which the tax collector’s senior officials are looting in cahoots with a corrupt network of informants.

In April, The NewsHawks reported Zimra was caught in a corruption storm in which its senior officers were accused of conniving with tax evaders in exchange for payment and partaking in attendant financial rewards.

There are concerns pertaining to the culture of opaqueness around how the whistle-blower facility operates. A large number of conflicted transactions has over the years aided underhanded dealings. The plunder has continued unabated with millions of taxpayer dollars being stolen through the racket.

The NewsHawks has previously spoken to insiders and other sources on how the Zimra whistle-blowers facility is fraught with irregularities as well as how whistle-blowers like Kujinga could have managed to cash in millions of dollars from the facility.

The network operates like this: senior Zimra officials get information from whistle-blowers and then help them to consolidate and process their cases expeditiously using inside information for a huge cut. Under the whistle-blower facility, Zimra is supposed to reward legitimate informants on cases relating to tax evasion under section 34B of the Revenue Authority Act (Chapter 23:11) as read with Statutory Instrument 150 of 2020.

Statutory Instrument 150, gazetted on 26 June 2020, regulates the payment of rewards to informants upon whistleblowing and recovery of revenue. The reward is 10% of the amount recovered on the basis of information supplied.

 Corrupt Zimra officials always manipulate that. Zimra also undertakes to protect the identity of the informants at all times as provided for in the secrecy provisions of the Revenue Authority Act, but it has failed to do so and is endangering whistle-blowers. In the budget statement, Ncube said government would expedite the development of legislation to protect whistle-blowers.

 “The fight against corruption is being enhanced through capacitation of respective institutions such as Zacc and the relevant law enforcement agencies. Where necessary and feasible, government is decentralising these institutions across the country to enable them to effectively undertake their mandate,” he said.

“As part of implementing the National Anti-Corruption Strategy, government will expedite the development of legislation to protect whistle-blowers.”

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