Econet denies prejudicing the gvt of $300m, decries selective "misapplication" of the law

Mobile Network Operator Econet Wireless Zimbabwe has been accused of prejudicing the government of $300 million dollars through tax evasion and externalisation. However, the MNO has refuted all allegations saying it was being unjustly targeted.  It also revealed that it was yet to see the audit report in which the allegations were made.

On the charge of evading taxes on dutiable items through false declarations, Econet said all three mobile network operators imported base stations in the same manner, yet it was the only one being targeted.

Other operators imported base stations in exactly the same manner as we did. No issues have been raised with them. This selective misapplication of the law is being challenged through the Courts.

On the externalisation charge, where Econet was accused of overstating the price of goods purchased from its Mauritius company, Econet responded

This is false. The Mauritius procurement arm of the group extended three years credit to the Zimbabwe Company. It accepted payment partly in shares and partly cash. The price to the Zimbabwe Company included finance charges covering the three year period which were equivalent to 18% per annum of the cost of the equipment. The finance charges were quite low compared to the rate of between 24.7% to 44.7% per annum (as per the Monetary Policy Statement issued on 28 July 2010) at which the company would have borrowed locally at the time.

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