Own Correspondent|President Robert Mugabe granted value added tax (VAT) exemptions to his wife Grace which deprived the state of about US$200 000 ($4 million).
Nine applications for exemptions were sent to Mugabe between 2012 and 2014 by Stanley Nhari, general manager of Grace’s Gushungo Holdings, and managers of Mwenewazvo Farm, Grace Mugabe Orphanage and Amai Mugabe High School.
Gushungo administrator Farai Jemwa also wrote to Mugabe in 2015 asking that Grace be exempt from paying tolls at Eskbank on her daily commute along the A11 between Mazowe and Harare.
Letters addressed to Mugabe indicate that Grace did not pay VAT on goods that cost US$350 000 ($7 million) on 19 March 2012.
She then applied for another exemption for furniture valued at US$150 000 ($3 million).
The same request was made for office stationery worth US$50 000 ($1 million) on September 6 2012.
In the same year, the former first lady sought exemptions on cement valued at US$122 939 ($2.5 million) for the Gushungo dairy farm and other materials that cost US$119 560 ($2.4 million).
For Blue Roof, the Borrowdale mansion where the Mugabes lived, she asked her husband for a VAT exemption on exterior paint costing US$118 585 (R2.4 million).
She also avoided VAT on centre pivots for irrigation on Mwenewazvo Farm that cost US$18 000 ($360 000).
In June 2013, she sought VAT exemption for goods with an estimated cost of US$260 000 ($5.2 million), and in 2014 for building materials worth US$123 120 ($2.5 million).
In total, Grace avoided paying VAT of US$196 830 ($3.9 million) after buying goods worth US$1 312 204 ($26.2 million).
Jemwa’s letter to Mugabe about the Eskbank toll said: “May I therefore request for your assistance in the completion of the relevant procedures culminating in the issuance of the relevant exemption.”
Mugabe died in September and Blue Roof and the Gushungo dairy farm were listed as part of his estate.
According to the Tax Act, a president does not pay income tax but there is no exemption from VAT on his business interests.
Tax expert Sydwell Nsingo said there were protocols for all tax issues, none of which had anything to do with the office of the president.
“For any tax matters, one should apply to the commissioner-general of the Zimbabwe Revenue Authority. Depending on the matter, he will then liaise with the finance ministry or in some cases he will communicate with the relevant line ministries,” he said.
However, in Grace’s case, the applications for exemptions were approved in directives from the President’s office to ZIMRA.
Colls Ndlovu, an economist formerly with the Reserve Bank of SA, said: “There’s a list of goods that are exempt from VAT and normally they are listed in the minister of finance’s budget statement. Others can be added through statutory instruments.
“That list makes it clear, and so there’s no need to apply for exemption otherwise it will amount to favouritism.”
None of the goods for which Grace applied for exemption were on the VAT free list, said Ndlovu.
Analysts said the VAT exemptions were just the latest example of abuse of power by the ruling elite.
“Zimbabwe has institutionalised corruption to an extent that it is becoming normal,” said political commentator Nigel Nyamutumbu.
“It is unfortunate that for all these years Mugabe was president, critical decisions such as tax exemptions were not subjected to due process but were a bedroom affair.”
Nyamutumbu said the same could be said of the case in which Marry Chiwenga, wife of Vice-President Constantino Chiwenga, is accused of illegally sending US$1m ($20 million) to South Africa and China.
“Citizens fail to get their hard-earned foreign currency while those in the corridors of power not only have easy access but they abuse funds that do not even belong to them,” he said.
“This thuggish daylight robbery is actually the root of the problem bedevilling the country.”
Grace Mugabe’s office did not respond to numerous requests for comment.
– Sunday Times