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Tag: ZIMRA

  • ZIMRA Wins Appeal Against Pacific Cigarette Company

    ZIMRA Wins Appeal Against Pacific Cigarette Company

    The Zimbabwe Revenue Authority (ZIMRA) successfully appealed a High Court ruling, with the Supreme Court siding with it in its refusal to issue a Tax Clearance Certificate (TCC) to Pacific Cigarette Company Ltd. while it owed over $19.5 million in taxes and was under corporate rescue. The court found that the High Court had misdirected itself by compelling ZIMRA to issue the TCC despite Pacific’s $19.2 million in income tax arrears and $330,000 in non-resident tax. ZIMRA had rejected the TCC application in January 2025 because the company had settled current obligations but made no payments toward the arrears.

    The Supreme Court ruled that ZIMRA’s refusal was an administrative decision, not an enforcement action, and that tax obligations remain enforceable during corporate rescue. The court also dismissed Pacific’s claim that withholding the TCC violated the moratorium on enforcement actions, noting the company’s corporate rescue plan lacked a proper repayment arrangement for its arrears.

    The Supreme Court overturned the High Court’s decision, affirming ZIMRA’s right to enforce its statutory mandate without penalty.

  • Zimbabwe Court Approves Urgent Hearing in Pacific Cigarette Tax Dispute

    Zimbabwe Court Approves Urgent Hearing in Pacific Cigarette Tax Dispute

    Pacific Cigarette Company secured approval from Zimbabwe’s High Court for an urgent hearing after it entered into voluntary business rescue over a $19 million tax dispute. The demand from the Zimbabwe Revenue Authority (ZIMRA) rendered Pacific insolvent, threatening the operations of the nation’s second-largest indigenous tobacco producer.

    The case centers on whether the tax obligations imposed on Pacific during its corporate rescue contravene established insolvency protections or represent enforceable liabilities under Zimbabwean law.

    Pacific argues that the tax demand infringes insolvency protection and so its formal request for a tax clearance certificate from ZIMRA should be granted. The authority, through its tax and revenue management system, established conditions for issuing such certificates in 2023, which Pacific asserts it complied with yet faces contested liabilities following ZIMRA’s revised taxation approach for toll manufacturers. This change saddled Pacific with the disputed tax obligations, compounded by ZIMRA’s garnishment of its bank accounts to make sure the money was paid.

    Justice Gibson Mandaza recognized the urgency of Pacific’s application and directed the case to proceed. He said the draft order under challenge required adjudication on its merits, specifically concerning whether a company under corporate rescue is exempt from tax obligations. The court acknowledged that corporate rescue, a process governed by insolvency laws, aimed to enable companies to reorganize their affairs without undue liabilities and needed to be assessed on a case-by-case basis and could not be presumed at the earlier stages.