A local tax expert has claimed that Zimbabwe could be losing millions in tax revenue. Tax Matrix managing Director, Mr Marvelous Tapera, says multinational companies which are also known as Transnationals might be evading taxes.
By transfer pricing we are talking about shifting profits from one company to the other and multinational corporations do that.
A research about the illicit financial movement was done in 2014 where it was established that the country could be losing millions per year to transfer pricing although I can’t give figures at this stage.
He further blamed these leakages on government and ZIMRA. The Zimbabwean government is still to implement new ways to tackle transfer pricing.
Transfer pricing is very important. Rules were introduced in 2016 but the key thing is that they haven’t been effected as the legislature and tax fraternity are still trying to understand them.
Transfer pricing is all about benchmarking which should be enhanced by database.
You can learn more about Multinationals here.