Zimra Faces $1.7 Million Loss in Vehicle Purchase Deal
By Priviledge Zviregei
The Zimbabwe Revenue Authority (Zimra) has suffered a significant setback after losing 61 vehicles that were ordered and paid for in Zimbabwe dollars due to a series of unfortunate events. Delays in the disbursement of foreign currency by the central bank, combined with volatile currency fluctuations, resulted in the payment shrinking to an amount sufficient for only 24 cars.
In a testimony before lawmakers, officials from Mike Harris, a Toyota dealer, revealed that out of the 70 cars paid for by Zimra, only 9 Toyota Corolla vehicles would be delivered. The payment of ZWL $209 million (equivalent to US$1.7 million at the official exchange rate) made by the tax collector was eroded by inflation, causing the loss of 35 Toyota Hilux double-cab cars and 50 Toyota Corolla vehicles.
According to the Auditor General, Zimra made the payment on February 24, 2022, but as of December 2022, only 15 Toyota Hilux vehicles had been delivered, with none of the Toyota Corolla vehicles received.
Last year, Zimra attempted to cancel a tender for the supply of 85 vehicles worth over US$3.9 million. However, the High Court Commercial Division rejected the appeal, citing a failure to prove that Mike Harris deliberately failed to supply the remaining 70 vehicles despite full payment. Zimra had paid for the vehicles in Zimbabwe dollars, with the understanding that Mike Harris would obtain the necessary foreign currency through the Reserve Bank of Zimbabwe (RBZ) auction system.
Mike Harris attributed the delays in obtaining foreign currency allocations and the impact of exchange rate fluctuations as reasons for its inability to deliver all 85 cars. The company’s CEO, Brian Kaukonde, informed the Public Accounts Committee of Parliament that only 9 Toyota Corolla vehicles would be supplied out of the 50 originally agreed upon. None of the remaining 20 Toyota Hilux vehicles would be delivered to Zimra, despite the tax collector having made full payment for all 85 vehicles.
Kaukonde emphasized that the exchange rate fluctuations and the passage of time between signing the contract and receiving payment had a detrimental effect on the procurement process.
Zimra, having paid in local currency, sought to cancel the contract and requested a refund equivalent to the value of the payment in US dollars at the time. However, their appeal was unsuccessful.
