Government was yesterday left with egg on its face after Zimbabwe’s embassy in the United Kingdom was named among 23 diplomatic missions that are not paying their rates.
The diplomatic missions now owe the British taxman more than £1,5 million in unpaid business rates, which should have been paid on December 31, 2017.
Out of the 23 named foreign missions, the embassy of Sudan tops the list while Iran and Zimbabwe trail behind in second and third place respectively.
Zimbabwe’s embassy, which occupies a Grade 11-listed building in central London, reportedly owes £101 694 (about US$129 000).
More than £73 000 of the debt is owed by Syria, which the UK government is unable to collect because the country is currently not represented in that country.
According to the list of owning missions, Sudan owes £137 122, followed by the Iranian embassy at £123 570.
Deputy Information minister Energy Mutodi said while government was aware of the arrears, it cannot expunge the obligation at the moment due to the prevailing foreign currency shortages.
He said an economic transitional stabilisation programme being pursued by government seeks to reduce its expenditure and release resources towards the reduction of its domestic and external debts.
On the international front, Mutodi said efforts were also currently underway to normalise relations with countries that were previously not in good books with Harare.
The head of UK business rates at property firm Altus Group, Robert Hayton, said many of these embassies operate from prime central London real estate and are actively dodging their tiny tax contributions.
He said the amount owed by foreign diplomatic missions and embassies has rocketed by 43 percent compared with a year earlier in what is likely to anger UK companies that have endured major hikes in their utility bills.
While diplomatic missions are generally exempt from national, regional or municipal taxes, the Mail Online revealed on Monday that embassies are nevertheless encouraged to pay part of their bill.
The fraction they are required to pay is about six percent of what a normal firm would ordinarily fork out.
Hayton said embassies from Qatar, Ukraine and Egypt all have so far refused to pay their business rates, as have the High Commissions of Malaysia and Pakistan, despite demands from officials at the Foreign Office.
Zimbabwe operates 46 diplomatic missions, which are struggling to meet their obligations due to the economic crisis in the country.
Foreign Affairs minister Sibusiso Moyo is on record saying government has started mobilising resources to clear arrears in respect of salaries, rentals and other running costs for its various embassies around the globe as part of efforts to rebuild the country’s image.
President Emmerson Mnangagwa has already approved a plan to downsize the country’s diplomatic missions, taking into account Zimbabwe’s current economic environment and affordability.
The rationalisation of diplomatic missions, which also puts a ceiling on rental payments for diplomats, aims to balance the cost of maintaining missions and the business value they generate.
Zimbabwe’s new finance minister, Mthuli Ncube, has also announced that the government is planning to reduce the number of the country’s foreign missions.
In the 2018 national budget, government ran a $15 million deficit through expenditure directed at foreign missions.
“Currently, Zimbabwe has diplomatic presence at 46 embassies and consulates, staffed by around 581 home-based and locally recruited staff. The above diplomatic presence is currently imposing annual budgetary levels of around $65 million, which is above available 2018 budget capacity of $50 million.