Assuming the office of a public officer (PO) is not a simple matter. There are responsibilities that come with it and in breach, personal penalties including a jail term may be levied on the PO. The PO is the voice of the company regarding tax matters and represents the company in meetings with the tax authority. Any other person wishing to communicate with the tax authority including tax advisors must be authorised by the PO in writing and all communications from the ZIMRA are for the attention of the PO. Everything that is supposed to be done by the company shall be deemed done through the PO. He or she is answerable for any omission or commission done or to be done by the company in terms of the tax law. Anything done by the PO while acting for the company is deemed done by the company. Assessments may also be made in the name of the PO. This is a very important office from the ZIMRA perspective.
The Income Tax Act requires every company carrying on trade or with office or other established business in Zimbabwe to be represented at the ZIMRA by an individual residing in Zimbabwe. The company, its agent or legal practitioner is tasked with the responsibility to make this appointment and to communicate the appointment to the ZIMRA within 30 days of commencing trade or establishment of a place of business in Zimbabwe or of the previous public officer vacating office. If no appointment is made, the Commissioner may appoint the managing director, director, secretary or other officer of the company to be the public officer (MA Limited v Zimra16-HH-316). The office of the public officer must constantly be filled up and only one person can be a PO at a time. Nevertheless lack of appointment does not exonerate the company from carrying out the duties or tasks it is required to perform in terms of the law. In the event of the company being placed under judicial management or in voluntary or compulsory liquidation, the judicial manager or liquidator duly appointed shall be required to exercise the roles of the PO. For the convenience of the ZIMRA, a public officer must be a signatory to the company’s bank accounts and should be eligible to take full responsibilities of the company’s tax affairs. Preferably he/she must have vast knowledge and much involvement in tax and accounting matters.
The PO is supposed to be registered separately from company registration at ZIMRA. Documentation to be submitted to formalise his/her appointment include; REV 1 Form, a letter appointing him/her to be the public officer of that company, personal details stating the full name, I.D. number, proof of residence in the form of utility bills and a statement to the effect that the public officer is a signatory to the company’s bank accounts. Also required is a certified copy of identity document and stamped personal bank statement. The company should ensure the person appointed as public officer provides consent in writing to act as a public officer and keeps the written consent within company records. Meanwhile, the ZIMRA portal will deny company registration until the PO has been registered.
A PO can be assessed in his/her own name on the income he/she is a representative taxpayer or which he/she has the management, receipt, disposal, remittance, payment or control, provided such assessment can only be made upon him/her in his/her representative capacity only. The assessment should also take into consideration any credit, deduction, exemption or right to deduct a loss entitled to the taxpayer being represented. The tax payable on this assessment shall, except for assessment served on the PO of a company, be recoverable from the representative taxpayer, but to the extent only of any assets belonging to the person whom he represents which are in his possession or under his management, disposal or control. The tax payable in respect of any assessment made upon a PO of a company in his capacity as such shall be recoverable from the company of which he/she is the PO.
There are penalties for defaulting of roles by PO. The Income Tax Act places personal liability on the PO for any tax payable by the company, if, while it remains unpaid (a) he alienates, charges or disposes of the income in respect of which the tax is chargeable; or (b) he disposes of or parts with any fund or money which is in his possession or comes to him after the tax is payable when from or out of such fund or money the tax could lawfully have been paid. Furthermore, in cases of insolvent trading, a public officer and any person who is a director may be committing an offence. The PO and other directors are jointly and severally liable for the tax debts of the company wound up voluntarily or deliberately put into liquidation in circumstances that give rise to a reasonable suspicion that the intention was to avoid any tax liability (Trek Petroleum (Private) Limited v ZIMRA No SC56/17). Top of FormBottom of FormThe Companies Act also imposes personal liability for the entity’s debts where there is a piercing of the corporate veil, either at common law, or under statute. It is a breach of duty of care and diligence if a director or a PO acts with the intent to violate applicable positive law, or where he intentionally fails to act in the face of a known duty to act, demonstrating a conscious disregard for his duties. A breach of the tax laws constitute a breach of these duties.
Being a PO, you shoulder a huge burden than any other person within the business when it comes to statutory obligations. Anything that goes wrong in terms of tax matters of the company, as the PO, you are responsible. In order to protect your name and that of the company, scrutinise all communications or any documentation prior to transmission to the ZIMRA. Ensure adequate internal control systems are in place to enable compliance with the tax laws. There are criminal penalties on you if you wilfully, negligently or fraudulently conduct yourself in terms of the tax laws. If you are no longer a member or an employee of the organisation you were once a PO of, ensure you have your name removed otherwise any breaches that may happen after you left may still be imposed on you if your name has not been deregistered at ZIMRA as the public officer.