Taxpayers are required by law to give sensitive information of their businesses to Revenue authorities, such as their income, expenditures, and business operations. Tax returns, assessments, and other correspondents or documents that a tax authority may seek from time to time may be used to supply the information. Section 34F of the Revenue Authority Act (Chapter 23:11) also grants the Commissioner General of ZIMRA unrestricted authority to demand full information regarding any person’s tax liability under any act managed by him or any matter relevant to the collection of such tax. He has access to a wide range of information, including deeds, plans, instruments, books, records, financial statements, trade lists, stock lists, and any other documents he deems appropriate for tax administration. The question is how secure this information is and whether it can be shared with third parties without the taxpayer’s authorization.
When taxpayers contribute personal information, they expect it to be kept private. Compliance is also enhanced if taxpayers are guaranteed that the information they submit will only be used for that purpose and will not be used for any other purpose. Zimbabwe implemented secrecy measures that put tight requirements on tax officers and others who receive tax information in order to safeguard taxpayer privacy and confidence. Section 34A of the Revenue Authority Act (Chapter 23:11) authorizes any person employed to administer taxes, authorized to receive payment of any revenues under the Revenue Acts, or authorized to examine records under the Commissioner-General’s control or custody to examine records guided by the law. The officer shall not divulge the information obtained to any person who is not the taxpayer, except in the exercise of his functions under the Act or unless required to do so by order of a competent court. As a result, no one other than the taxpayer, his representative, or the person to whom the information relates has access to any record within the Commissioner-General’s control or custody. Officers working under the Commissioner’s authority are required to swear a secrecy oath before exercising their duties; Section 5(4) provides that if the officer then discloses information to other people and not the taxpayer, during the course of his duties after taking the oath he or she shall be guilty of an offense and subject to a fine not exceeding level six or imprisonment for not more than one year, or both such fine and imprisonment.
However, the Commissioner-General has the right to disclose taxpayer information if he is required or authorized by the Minister or the Board for statistical purposes to provide information to the Minister or the Board. This should be in respect of the total amount of taxable income accrued during such periods to such classes of persons from such sources as the Minister or the Board may specify. Despite the fact that such information is supplied for statistical purposes, it may also be disclosed to the Minister as he deems desirable or essential in order to carry out Zimbabwe’s obligations under any international convention, treaty, or agreement. The Commissioner is also not bound by confidentiality laws if the taxpayer is a tax evader and he wishes to utilize the information for court appeals and reviews.
Although taxpayers may be assured confidentiality with regard to information in the custody of the ZIMRA, the requirements of the Interceptions of Communications Act (Chapter 11:20) may affect taxpayers’ right to privacy. According to Section 5(1)(d) of the Act, the Commissioner General is authorized to apply to the Minister for a warrant to intercept any relevant communication for the purposes of administering fiscal matters, i.e. ZIMRA, together with Central Intelligence Officers “CIO”, the Army, and the Zimbabwe Republic Police “ZRP”, is authorized to intercept mail, telephones, and other communications. Zimbabwe’s tax treaties additionally permit disclosure of information by competent authorities under the Exchange of Information Article when disclosure is essential and relates to taxes covered by the treaty.
The integrity of disclosure is frequently jeopardized when ZIMRA loses information that taxpayers would have provided. This calls into question the security of the information provided. However, taxpayers should be aware that they are powerless to prevent ZIMRA from accessing information, as doing so may result in the Commissioner issuing estimated assessments. The only solution is to guarantee that the information requested is recorded and signed for by ZIMRA personnel before it is released. It is also our belief that the new TARMS system, with its digitisation and lack of paperwork, have placed strict rules reducing the possibility of information being shared with third parties without the taxpayer’s knowledge, or being exposed in unusual instances. Meanwhile if a taxpayer’s privacy is violated or breached, he or she has a right to sue ZIMRA for breach of confidentiality.