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Govt moves on capital outflows

The Zimbabwe Revenue Authority (Zimra) is training its personnel to be able to analyse financial accounts of multi-national corporations as Treasury moves to stem capital outflows.

BY BUSINESS REPORTER

Patrick Chinamasa

Patrick Chinamasa

This comes, as it emerged that the economy was losing millions on the payment of management fees, brands and royalties.

Finance minister Patrick Chinamasa yesterday said the training of Zimra staffers would give them capacity to be able to interrogate multinationals’ financial accounts.

“We are going to train our Zimra staff on how to analyse accounts and books of multi-nationals. We are trying to zero in on where the capital outflow is from the continent,” he said.

“… we need to look at what they charge in management fees. Is it the same everywhere, what is the formula used to charge on brands? Our interest is whether we are treated fairly.”

Chinamasa said Treasury came across a scenario where management fees were 10% of gross revenue, although he would not name and shame the company involved.

“I have said to multinationals we are just looking for a fair playing field, let’s have dialogue and my office is open,” he said.

Chinamasa said some of the “so-called investments by foreign companies were coming in as loans”. He said a Zimbabwean company was opened, which would borrow offshore, thereby, burdening the country.

Multi-nationals stand accused of fleecing African countries through under-invoicing and transfer pricing.

According to a 2016 report by the United Nations Conference on Trade and Development, an estimated $854 billion was spirited out of the continent through illicit financial flows in the period 1970 and 2008.

Source :

newsday

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