Philemon Jambaya
ASSISTANT EDITOR
The Zimbabwe Revenue Authority is facing a substantial vehicle shortage following a botched car deal with Mike Harris, a local car dealership.
The issue stems from a combination of delayed foreign currency disbursement and brutal currency fluctuations that eroded the value of Zimra’s initial payment.
According to a recent meeting of the Public Accounts Committee of Parliament, Zimra had ordered and paid for a total of 85 vehicles, including 35 Toyota Hilux double-cab pickups and 50 Toyota Corollas.
The ZWL$3.9 million payment made in February 2022 was intended to cover the entire purchase. However, delays in receiving foreign currency allocation from the Reserve Bank of Zimbabwe and inflation significantly reduced the effective value of the Zimdollar payment.
Mike Harris, the car dealership, argued that the delays in securing forex coupled with the rapid depreciation of the Zimbabwean dollar hindered their ability to fulfil the entire order. They claim they could only import enough vehicles with the allocated forex to deliver 15 Toyota Hilux pick-ups.
This resulted in a significant shortfall. As of December 2022, Zimra had not received any of the ordered Toyota Corollas, and only 15 of the 35 Hilux pick-ups were delivered. The tax authority attempted to cancel the contract and recover the full amount in a lawsuit, arguing that the value of their ZWL payment had been significantly eroded.
However, the High Court Commercial Division dismissed the lawsuit, as Mike Harris had delivered a portion of the order. A subsequent agreement was reached where Mike Harris will deliver only nine additional Corollas by the end of June 2024, leaving a significant gap of 20 Hilux and 41 Corollas unfulfilled.
The Auditor-General’s report estimates Zimra suffered a loss of ZWL$209 million (approximately US$1.7 million at the official rate) due to the failed delivery of the remaining vehicles. This incident highlights the challenges of conducting business in Zimbabwe’s volatile economic environment, where reliance on the Zimbabwean dollar paired with delays and inflation can lead to substantial financial losses.
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