Pacific turns to business rescue after tax tiff wi...

Pacific turns to business rescue after tax tiff with Zimra

Zim Now Writer

A top local cigarette manufacturer is now under voluntary business rescue after the national revenue authority garnished the company’s accounts.

“PCC applied to be placed under voluntary business rescue on the 2nd of October 2023 and the Master of the High Court has as of the 4th of October 2023 appointed Mr. Reuben Mukavhi of Rubaya-Chinuwo Law Chambers Legal Practitioners as the corporate business rescue practitioner,” said Pacific Cigarette Company in a media statement

The company blamed the Zimbabwe Revenue Authority for undermining its business by deeming “the raw materials funded by our customers as income, subject to VAT".

“ZIMRA’s unprecedented actions on false tax violations have regrettably placed PCC in an insolvent position, forcing the company’s directors to place the business under voluntary business rescue to safeguard the interests of all creditors and stakeholders, whilst the company continues to try and amicably resolve the matter with the tax authority.

“They also levied an arbitrary mark-up and interest and penalties on PCC for the tax assessment period 2018 to 2020, to which we have objected. The issued tax assessments against the company impose tax liabilities amounting to US$19,315,233.82 and ZWL79,845,954.36,” said PPC in the statement.

ZIMRA garnished all PCC’s bank accounts in June this year.

“Next, ZIMRA took the unprecedented step of instructing our customers to pay ZIMRA any monies owed to PCC, effectively closing off all the company’s income streams.

“In an effort to get the garnish lifted, PCC submitted a payment plan proposal while awaiting the determination of the objection which payment plan was rejected by the Tax Authority,” reads the statement.

PCC acknowledged that it is obliged to meet the obligations placed on it by Zimra although it is challenging the tax assessments.

PCC formerly known as Savanna Tobacco Company is Africa’s second-largest indigenous tobacco company and Zimbabwe’s first locally-owned cigarette company.

The company produces the popular Savanna cigarette brands.

The company says it welcomes the appointment of Mr. Reuben Mukavhi and they are confident that the business will be able to trade back to solvency while we work to resolve the tax dispute.