DEPRIVATION
OF PROPERTY
The applicants contended that the provisions of section 38B(1)
and (2) as read with section 38E(1)(h)(i) of the Broadcasting Services Act
[Chapter 12:06] violate the fundamental right protecting them against
compulsory deprivation of property guaranteed under section 16(1) of the Constitution.
Section 16(1) of the Constitution provides as follows:
“16: Protection from
deprivation ...
DEPRIVATION
OF PROPERTY
The applicants contended that the provisions of section 38B(1)
and (2) as read with section 38E(1)(h)(i) of the Broadcasting Services Act
[Chapter 12:06] violate the fundamental right protecting them against
compulsory deprivation of property guaranteed under section 16(1) of the Constitution.
Section 16(1) of the Constitution provides as follows:
“16: Protection from
deprivation of property
(1) Subject to section sixteen A, no property of any
description or interest or right therein shall be compulsorily acquired except
under the authority of a law that”…,.
[The terms, substance and purpose of the provisions of the
law on the basis of which property other than agricultural land acquired for
resettlement of people in accordance with a programme of land reform may be
compulsorily acquired are then set out].
Section 16(7) of the Constitution provides:
“(7) Nothing
contained in or done under the authority of any law shall be held to be in
contravention of subsection (1) to the extent that the law in question makes
provision for the acquisition of any property or any interest or right therein
in any of the following cases -
(a) In satisfaction of any tax or rate.
(b)…,.”
The Constitution demands that statutory provisions be
looked at from the point of view of fundamental human rights and freedoms
enshrined in the Declaration of Rights. That means that, taking into
consideration the requirements of permissible limitation, statutory provisions
must not violate fundamental human rights. If the provisions of the Act, the
validity of which is impugned, are provisions in respect of taxation, the
effect of section 16(7)(a) of the Constitution is that they are not a
violation of the right to property. They are an infringement of the right if
they are shown not to be reasonably justifiable in a democratic society.
The obligation to pay the fee and obtain a licence for
possession of a receiver is imposed by law. The imposition of the obligation in
respect of the possession of a receiver, the fixing and collection of the
licence fee are all designed to enable the Zimbabwe Broadcasting Corporation to
compulsorily acquire property, in the form of money, from a person who
possesses a receiver.
The question for determination is whether the provisions of
section 38(b)(1) and (2) of the Broadcasting Services Act [Chapter 12:06], for
the acquisition of the licence fee, compulsorily paid to the Zimbabwe
Broadcasting Corporation or its agents, are in satisfaction of a tax within the
meaning of section 16(7)(a) of the Constitution?
There is no question that the mechanism of funding given
effect to by the provisions of the Broadcasting Services Act [Chapter 12:06],
the validity of which is challenged, is based on the public as the source of
the revenue needed by the Zimbabwe Broadcasting Corporation to finance its
operations. The method of funding chosen gives the Zimbabwe Broadcasting
Corporation direct access to and control of the use of the revenue collected.
Section 16(7)(a) of the Constitution relates to acquisition
of property under the authority of a provision of a law enacted by the State in
the exercise of the constitutional power of taxation vested in the Legislature
by section 50. Section 50 of the Constitution provides that “Parliament may
make laws for peace, order and good government of Zimbabwe.”
The power of the State to impose taxes has been described
by COOLEY in Constitutional Limitations…, as:
“One so unlimited in force, and so searching in extent, that
we scarcely venture to declare that it is subject to any restrictions whatever
except such as are put in the discretion of the authority which exercises it.
It reaches to every trade or occupation, to every object of industry, use, or
enjoyment; to every species of possession; and it imposes a burden which, in
case of failure to discharge it, may be followed by seizure and sale or
confiscation of property. No attribute of sovereignty is more pervading.”
There is no denying the general power of the Legislature to
impose taxes.
Although the constitutional power to impose taxes is wide
as to matters that may be chosen as subjects of taxation, a measure
representing its exercise must be strictly scrutinized to protect the right to
property. The provisions must be
construed with the view of giving a full measure of protection to the
fundamental human right alleged to be infringed. It is also a well settled rule
that the citizen is exempt from taxation unless the same is imposed by clear
and unequivocal language….,.
The general principle is that a tax is the obligation or
burden (debt) to pay a specific amount of money to a designated agent imposed
(levied) on a person by the State, in the exercise of the constitutional power
of taxation. The obligation is imposed in relation to or by reference to an activity
in respect of property selected in the exercise of a wide discretion as the
subject of taxation. The obligation for the payment of the tax is imposed by
the State in terms of a law of general application on the public or a
substantial section of the public to raise money for a public purpose. The
primary meaning of taxation is, therefore, raising money for the purposes of Government
by means of compulsory contributions from individual persons.
A tax is not a tax merely because the word “tax” is used to
describe the obligation to be paid for a public purpose. The word 'tax' is a
generic term or 'genus' covering a variety of species of obligations to pay
money for public purposes.
An obligation of the same cannot be excluded from proper
classification because of the name by which it is called. In other words, the
fact that the fixed amount of money compulsorily payable by members of the
public who possess receivers is called a 'licence fee' would not alter the fact
of its being a 'tax'. The term 'licence fee' is not a definition but is a
conclusion. It is a label describing a debt imposed on a person by a statute in
respect of an activity in relation to property.
There are many kinds of taxes that may be imposed by the
State in the exercise of the power of taxation.
In the American case of Hylton v United States 3 Dall 171
(Supreme.justice.com) it was held that the term 'taxation' covers every
conceivable exaction which it is possible for a Government to make, whether
under the name of a tax or under such names as rates, assessments, duties,
imposts, excise, licences, fees or toll. In fact, section 113(1) of the
Constitution defines 'tax' to include 'duty or due'. The Concise Oxford
Dictionary (7ed) defines the word 'due' to include 'fee' as the concepts
connote an obligation or debt owed to some other person.
In Alberts v
Roodepoort - Maraisburg Municipality 1921 TPD 133…, money compulsorily paid
under the name 'sanitary fees' charged by a local authority was held to be a 'tax.'
In Permanent EST Finance Co Ltd v Johannesburg City Council 1952 (4) SA 249 (W)
RAMSBOTTOM J…, expressed the view that “to require any person who carries on a
business or who owns a dog or a motor car to pay a prescribed fee is…., to
impose a tax.”
So a tax is not any the less a tax because a different name
is given to it.
In the Australian case of Leake v COT (State) (1934) 36 WALR
66 DWYER J…, said:
“A compulsory contribution or an impost may be nonetheless
a tax, though not so called; the distinguishing features of a tax being in fact
that it is a compulsory contribution imposed by the sovereign authority on and
required from the general body of subjects or citizens.”
In Constantinides v Electricity Authority of Cyprus (1982)
3 CLR 798, the Supreme Court of Cyprus held that:
“An imposition is a tax if it is found to fulfil certain
characteristics, namely;
(a) It is compulsory and not optional;
(b) It is imposed or executed by the competent authority;
(c) It must be enforceable by the law;
(d) It is imposed for the public benefit and for public
purposes; and
(e) It must not be for a service for specific individuals
but for a service to the public as a whole, a service in the public interest.”
In this jurisdiction, the authority on the elements which
designate a tax is the decision of the Supreme Court in Nyambirai v National
Social Security Authority & Anor 1995
(2) ZLR 1 (S). Tax was defined in Nyambirai v National Social Security
Authority & Anor 1995 (2) ZLR 1 (S)….,
as “a compulsory, and not an optional contribution, imposed by the legislature,
or other competent authority upon the public as a whole or a substantial sector
thereof, the revenue from which is to be utilised for the public benefit and to
provide a service in the public interest.”
The question whether the provisions of the Broadcasting
Services Act [Chapter 12:06], the validity of which is challenged, are
provisions in respect of taxation requires a finding to be made on the nature
of the law. 'Law' is used to mean a provision of the Act as is so defined in section
113 of the Constitution. In determining the nature of a law, a court should
examine the substance of the provisions to decide whether the matter they deal
in is a matter in respect to which the State has power to legislate. The court
would be concerned with what the provisions of the law are doing.
The applicants conceded, through counsel, that the
obligation to pay a licence fee provided for under section 38B(1) as read with
section 38E(1)(h)(i) of the Broadcasting Services Act [Chapter 12:06] ensures that
the licence fee is a compulsory contribution to the general funds of the
corporation. The provisions impose an obligation to pay the money to the Zimbabwe
Broadcasting Corporation for a public purpose.
It was common cause that the obligation is imposed on a substantial
sector of the public. All persons who have in their possession equipment
capable of receiving broadcasting service bear the obligation to pay the
licence fee for the possession of the gadget.
On the question whether the compulsory contribution is
imposed by the legislature or other competent authority, the applicants'
position was that it is the Zimbabwe Broadcasting Corporation that exacts the
licence fee. Counsel for the applicants argued that as the Zimbabwe
Broadcasting Corporation was incorporated in terms of the Companies Act [Chapter
24:03] it is a private company carrying on the business of providing
broadcasting service. He argued that a provision of a law which gives a private
company power to fix and collect licence fees to raise funds for its own
operations is not a law in respect of taxation.
According to counsel for the applicants, the purpose of the
provisions of the Broadcasting Services Act [Chapter 12:06], the validity of
which is challenged, is to give the Zimbabwe Broadcasting Corporation an unfair
financial advantage over other competitors in the business of providing
broadcasting services.
Counsel for the respondents argued that notwithstanding its
incorporation in terms of the Companies Act [Chapter 24:03], the Zimbabwe
Broadcasting Corporation is a 'public broadcaster.' The effect of counsel for
the respondents' argument is that the
Zimbabwe Broadcasting Corporation is a 'public broadcaster' because the statute,
in terms of which its incorporation was authorized, says it is a 'public
broadcaster.'
The argument by the applicants is misplaced.
The obligation to pay the licence fee is imposed by the
Legislature on every person who possesses a receiver. It is the Legislature
that exercised its wide discretion to select possession of a receiver as the
subject for the purposes of imposing the obligation to pay the money on all
persons who get to be in control of a receiver. The fact that the Legislature
gave the Zimbabwe Broadcasting Corporation the power to fix the value of the
obligation with the approval of the Minister of State for Information and
Publicity in the President's Office (“the Minister”) by a statutory instrument
does not make the Zimbabwe Broadcasting Corporation the legislative authority.
The Legislature is unrestricted in its choice of subjects
on the basis of which to impose the obligation to pay the money….,.
The contention that the obligation payable by those who are
in possession of receivers is not a tax because its value is fixed by the Zimbabwe
Broadcasting Corporation and collected by it for payment into general funds for
use in its operations overlooks important factors. Firstly, the fixing of the
amount to be paid is an obligation imposed on the Zimbabwe Broadcasting
Corporation by the Parliament. It is part of the obligation to pay the money
imposed on every person in possession of a receiver who falls outside the class
of people exempted from the liability.
There is no legal limitation on the value of the obligation
the Zimbabwe Broadcasting Corporation may fix.
That fact attests to the exercise of the constitutional
power of the State to impose taxes. The Zimbabwe Broadcasting Corporation would
be exercising delegated power. As long as the delegated power is exercised in
the manner set out, and within the limits imposed by the delegating law for the
specific purpose prescribed, the result is the same at law as if the power is
exercised by the principal. The Zimbabwe Broadcasting Corporation would be
exercising the power to fix the amount of the obligation to be paid as tax on
behalf of the Parliament. That is why the delegation is in the form of an
obligation.
Collection of the payment of the obligation imposed on
those who are in possession of receivers is imposed on the Zimbabwe
Broadcasting Corporation as an obligation. When the Zimbabwe Broadcasting
Corporation and its appointed agents demand, in appropriate circumstances,
production of a listener's licence from a citizen, they are discharging a legal
obligation. Collection is in aid of revenue. It occurs after the obligation to
pay the money fixed by the Zimbabwe Broadcasting Corporation, in terms of the Broadcasting
Services Act [Chapter 12:06], has been imposed.
Collection has no relevance in the determination of the
question whether the obligation to pay the money is a tax or not.
The requirement that the money collected as payment of
licence fees should be paid into the general funds of the Zimbabwe Broadcasting
Corporation and not into the Consolidated Revenue Fund is consistent with the
provisions of section 101 of the Constitution. The earmarking of the money for
payment into the general funds to be used as revenue by the Zimbabwe
Broadcasting Corporation to meet the costs of its operations underscores the
intention to protect the financial independence of the Zimbabwe Broadcasting
Corporation. State revenue cannot be earmarked except at the point of
expenditure by appropriation. The section provides:
“101 Consolidated
Revenue Fund
All fees, taxes and other revenues of Zimbabwe from
whatever source arising, not being moneys that -
(a) Are payable by or under an Act of Parliament into some
other fund established for a specific purpose; or
(b) May, by an Act of Parliament, be retained by the
authority that received them for the purpose of defraying the expenses of that
authority;
shall be paid into and form one Consolidated Revenue Fund.”
In the first place, it may be admitted that revenue is
essential to the effective operation of the public broadcasting service and the
existence of the Zimbabwe Broadcasting Corporation. The State used its power to
provide the Zimbabwe Broadcasting Corporation with a reliable source of funding
to enable it to properly fulfil its statutory obligations. The money received
constitutes the proceeds of the discharge of the obligation. The obligation is
separate and precedent to the proceeds. The authorization of any agent, by the
Legislature, to collect the proceeds of the performance of the obligation to
pay the money is a matter that cannot be prevented by any legal decision.
The Legislature, with full power over the subject of
taxation, short of arbitrary and unreasonable action which is not to be
assumed, inserted these provisions on payment of the revenue into the general
funds operated by the Zimbabwe Broadcasting Corporation in an Act specifically
providing for the raising of revenue. It is sufficient for determination of the
question of their validity that these provisions have a reasonable relation to
the exercise by the Legislature of the taxing power conferred on it by the
Constitution.
It must follow that the Zimbabwe Broadcasting Corporation
is required to use the revenue to meet its obligations in the performance of
its functions as a public broadcaster. The revenue raised from compulsory
payment of the money is to be used in the provision of broadcasting services in
the public interest. The Zimbabwe Broadcasting Corporation is required, under
Part 1 of the Seventh Schedule to the Broadcasting Services Act [Chapter 12:06],
to make programmes available to Zimbabweans in all the languages commonly used
in Zimbabwe. One of the purposes of providing public broadcasting services is
to meet the needs of the unserved sections of the population…..,.
The mechanism of funding was adopted as an alternative to
ordinary State budget appropriations because it would enable the Zimbabwe
Broadcasting Corporation to operate free of Government administrative
regulations. The method of funding would also enable the Zimbabwe Broadcasting
Corporation to avoid Government oversight of its day-to-day operations. The
idea was to keep the Government out of control of the purse strings of the Zimbabwe
Broadcasting Corporation and ensure that the Zimbabwe Broadcasting Corporation
receives its funding directly from the public through taxation. State funding
would give the Government the power to control the public broadcaster's
activities, particularly the selection and presentation of television and radio
programmes. There is nothing unusual about the obligation to pay the amount of
money fixed by the Zimbabwe Broadcasting Corporation with the approval of the
Minister by statutory instrument as a licence tax on possession of a receiver.
Whilst giving effect to a tax-based mechanism of funding,
the provisions also give the public broadcaster the right of direct access to
and control of the use of the revenue thereby protecting it from interference
by the State. The mechanism of funding given effect to by the provisions of the
Broadcasting Services Act [Chapter 12:06], the validity of which is challenged,
shows that the scheme of public broadcasting service provided for is not a
State enterprise nor is it a State-sponsored enterprise.
It is a public-sponsored enterprise.
In imposing the obligation on every person who possessed a
receiver to pay the amount of money fixed and collected by the Zimbabwe
Broadcasting Corporation as a licence fee, the provisions authorized the
acquisition, by the Zimbabwe Broadcasting Corporation, of property in
satisfaction of the obligation.
Section 38(B)(2) of the Broadcasting Services Act [Chapter
12:06] makes provision for the acquisition of property in satisfaction of a tax
within the meaning of section 16(7)(a) of the Constitution. The primary
object of section 38(b)(1) and (2) of the Broadcasting Services Act [Chapter
12:06] is the raising of revenue.
However labeled, the obligation imposed by section 38(b)(1)
of the Broadcasting Services Act [Chapter 12:06] on persons in possession of
receivers is a 'tax.'
In the light of the contention advanced on behalf of the
applicants, that the money compulsorily paid to the Zimbabwe Broadcasting
Corporation as a licence fee is not a tax, no argument was made to the effect
that section 38(B)(1) as read with section 38E(1)(h)(1) of the Broadcasting
Services Act [Chapter 12:06] is not reasonably justifiable in a democratic
society. The onus was on the applicants to show that the provisions went
further than was reasonably justifiable in a democratic society. The standard
of proof is a preponderance of probability. See Nyambirai v National Social
Security Authority & Anor 1995 (2)
ZLR 1 (S)…,.
The presumption is that the provisions of the Broadcasting
Services Act [Chapter 12:06], the constitutionality of which is under attack,
are reasonably justifiable in a democratic society. They are not in violation
of section 16(1) of the Constitution as they incorporate the just demands of a
democratic society.