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    Thursday, 17 October 2019

    Tongaat Hullet takes ZIMRA to court


    CHIREDZI – Sugarcane giant, Tongaat Hullet Zimbabwe has taken the Zimbabwe Revenue Authority (ZIMRA) to court in a bid to recover millions of dollars wrongly deducted in taxes.
    Tongaat Hullet argues that ZIMRA made improper Value Added Tax (VAT) deductions when it recovered taxes for sugarcane delivered, milled, processed and marketed on behalf of farmers.
    Tongaat through its lawyers argue that the taxes which ZIMRA recovered from the company should instead have been deducted from the farmers’ incomes in accordance with the agreement between the farmers and Tongaat.
     Tongaat filed its 50 page lawsuit at the High Court in Masvingo at the beginning of October.
    Also sued jointly with Zimra are various sugarcane farmers associations, legislators for Chiredzi West and North Farai Musikavanhu and Roy Bhila respectively.
    The farmers’ groupings sued are Zimbabwe Sugarcane Development Association, Zimbabwe Cane Farmers Association, Mkwasine Sugarcane Farmers Trust, Commercial Sugarcane Farmers Association, Zimbabwe Sugarcane Association Royal Trust, Chipiwa Mpapa Mill Group and Chiredzi Productive Cane Growers Association.
    Tongaat seeks to recover millions of dollars in tax collected from 23% Divisional of Proceeds which the company gets after farmers deliver sugarcane to it.
    Tongaat insists that the VAT is supposed to be paid by sugarcane farmers from the 77 percent which they are paid according to the DOP agreement which was signed by every farmer.
    In a founding affidavit deposed by Tapiwa Makoni, Tongaat company secretary, the miller has two agreements with farmers which are, cane purchase agreement and cane milling agreement of which the cane milling agreement is the most common one in which the miller would merely provide a milling service to the farmer, market the sugar, molasses and other by-products on behalf of the farmer together with their own then remit to the farmer proportional proceeds less milling charges and marketing expenses.
    Makoni further said according to the cane milling agreement the farmer would be invoiced for the milling costs and valued added tax would be levied/added to the value of the milling costs and collected from the farmer for the milling costs.
    “Applicant seeks to recover from the farmers the VAT which they were directed by ZIMRA to pay. The applicants believe that it was only reasonably proper in the circumstances that assuming without conceding that it is correct as decided by ZIMRA who are the first respondents that they were to be as providing to the farmers a service which attracts VAT, then they would be enti-tled and required by the same token of charge, levy and collect it from the recipient of the service who is the farmer as would be the case anyhow with a regular cane milling agreement,” read the Court document.
    #Masvingo Mirror#
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