LOCAL cigarette manufacturer, Savanna Tobacco’s bank account was garnished for failing to pay customs and excise duties, information obtained by Standardbusiness has shown.
REPORT BY OUR STAFF
Documents in the paper’s possession indicate that the company was indebted to the State in excise duty and had its bank account garnished in March this year.
The documents indicate that the Zimbabwe Revenue Authority (Zimra) wrote to the company’s bankers seeking to be furnished with information pertaining to the existence of the company’s bank account details and certificate of balance as at March 12 2013.
A bank manager, where the account is held, was subsequently appointed by Zimra on the same date to become an agent for payment of duty, by one J Cochrane on behalf of Commissioner-General Gershem Pasi.
A total of US$654 522 was subsequently garnished as of March 12 this year.
It was not clear whether the total amount owing had been paid off to revenue collectors after garnishing, as questions sent to the company’s head office were met with a terse response.
“Please refer to Page l of today’s [Thursday] business Herald where this story has already been run and answers all the issues you have raised,” said one Grace Mchina, personal assistant to Savanna Tobacco executive chairman Adam Molai.
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In The Herald Business article, Savanna claimed to have sorted its dispute with Zimra and said it remained committed to meeting its tax obligations.
“We confirm that we had a dispute which we addressed with Zimra, culminating in the issuance of a tax clearance certificate. This clearly indicates that the driver of the garnishee has been amicably addressed,” a Savanna spokesperson told The Herald Business.
It was also not particularly clear as to circumstances surrounding the non-payment of duty.
In one of the documents, a section of the “Notice of Appointment of Agent for Payment of Duty” indicates that any future deposits in the account would be made towards liquidation of the tax liability.
The company has developed three brands — Pacific, Pegasus and Branson — with each brand carrying three products under its wings.
Last year, Finance minister Tendai Biti increased excise duty on cigarettes for the 2013 National Budget.
Duty on cigarettes went up from US$10 per 1 000 sticks to US$15 with effect from December 1 2012 representing a 50% increase.
This development has adversely affected local cigarette manufacturers’ fortunes, hitting into their bottom lines.
British America Tobacco recently said volumes during the first quarter of the year declined by 15% due to government’s decision to raise excise duty on cigarettes. The increase in excise duty led to the company operating at only 60% of its total capacity.
