We often read from the press that the Zimbabwe Revenue Authority (“ZIMRA”) has “garnished” a person’s bank account. This article explains what it means for a bank account to be garnished and under what circumstances ZIMRA does this.

As part of its mandate, ZIMRA has to ensure that taxpayers are paying the correct amount of tax. Tax payers generally submit self-assessment returns. However, from the day of submission of the self- assessment return, ZIMRA has 6 (six) years to issue an additional assessment (and in some circumstances more than six years). The additional assessment will set out the additional tax payable where ZIMRA is of the view that certain taxable income was not included in the self-assessment, or that certain deduction which should not have been allowed were allowed or any credit granted should not have been granted. In addition to this, ZIMRA may charge certain penalties and interest.

Once a party is in default of any amount due to ZIMRA either in terms of a self- assessment or any amended assessment, ZIMRA has the right to enforce payment even without going to court. It must be noted that even if one challenges ZIMRA, the principle of “pay now, argue later” is actually law and is found in section 69 of the Income Tax Act [Chapter 23:04]. Accordingly, once the tax is due, according to the law, it must be paid.

This brings me to what is meant by “garnishing” an account by ZIMRA. In terms of section 58 of the Act, ZIMRA may appoint any person to be an agent of a tax payer for the purpose of paying tax. Any person includes the taxpayer’s bank. Once the bank has been appointed as an agent of the taxpayer, they may lawfully be required to “to pay any tax due from any moneys in any current account, deposit account, fixed deposit account or savings account or from any other moneys, including pensions, salary, wages or any other remuneration, which may be held by him for, or due by him to, the person whose agent he has been declared to be.”

Accordingly, the Bank may be told to pay the tax due from the funds held in all the taxpayer’s bank accounts. The bank does not have to notify its client before they pay the monies over and they may not refuse to do so. You may simply receive a notification from the bank that monies have been paid from your account to ZIMRA in settlement of tax pursuant to a letter appointing the bank as an agent.  It is, therefore, important to engage with ZIMRA when in default of tax due.

The old adage comes to mind: you cannot hide from the taxman!