Magaya’s multi-million dollar empire (PHD) built on donations, court heard

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The latest rape allegations levelled against Prophetic Healing Deliverance (PHD) ministries by actress Charity Dhlolo has invited divided opinion with a large sector of the legal fraternity describing them as “flimsy” and “incoherent” .

Prophetic Healing and Deliverance Ministry (PHD) has refuted allegations of benefiting from selling wristbands, anointed oil and water or from running its guest house indicating that it generates all its money from donations and tithes.

This information was divulged in court where the church is facing four counts of tax evasion after having realised US$28 706 040.60 in a period of four years from allegedly selling regalia among other things to its congregants and failing to remunerate tax to ZIMRA in return.

The trial has kicked off before regional magistrate Hosea Mujaya and the church has pleaded not guilty to all four counts.

“The accused person denies having committed the alleged offence in the manner alleged,” said the PHD’s defence, Admire Rubaya and Everson Chatambudza.

“PHD only received donations, tithes, offerings, and contributions from its members. It denies generating taxable income through selling church regalia, anointing oil and holy water or from conducting any trade. It further denies generating taxable income through operating guest houses or accruals from any investments. All the monies received are exempted from income tax as they are donations.”

Further, PHD founded by controversial millionaire prophet Walter Magaya also told the court that it is not required by law to pay any export tax as it it is exempted from doing so. The court also heard that all the exported products are donations or  manufactured wholly from donations.

The State led by George Manokore alleges that PHD raises revenue from selling church regalia, anointing oil and holy water and also operating guest house at Yadah hotel. It is further alleged that sometime in October 2018; ZIMRA conducted tax investigations and recovered financial statements from PHD extending from 2013 to 2017.

Financial statements were also recovered from the Commercial Bank of Zimbabwe which was submitted by accused for loan application, the court heard.

The statements showed that PHD had realised sales amounting to US$28 706 040 during the period 2013 to 2017, and during that period the accused did not submit income tax returns to ZIMRA.

It is further alleged that during the same period PHD paid remuneration amounting to US $950 522.99 to Magaya’s wife, Tendai through bank transfers but no tax was withheld from her earnings.

PHD also transferred remuneration of amounting to US $2 403 658.24 to Magaya’s account but he was not subjected to Pay as You Earn tax (PAYE) as required by law.

The ministry is alleged to have not been in possession of records of all goods and services that it sells and the purchases thereafter which is a violation of Value Added Tax Act.

The court heard that the for the VAT returns during the said period, PHD failed to declare the exports it made and had submitted  VAT returns with false entries again with violation of the VAT Act.

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