adminDID you know that you can avoid unnecessary penalties by following basic tax compliance requirements?
Some clients have been penalised for failing to adhere to statutory requirements.
Most of these costs can be avoided because they negatively impact on the cash flows of businesses and the client’s reputation.
The statutes which ZIMRA administers provide for the charging of additional tax and penalties equal to the defaulted amount and interest, where a client fails to adhere to the provisions.
In some instances, fines, prosecution and imprisonment may be effected depending on the nature of the default.
Regular audits are usually conducted by the ZIMRA to check on compliance and to correct problem areas identified, as well as educate the clients where necessary.
Costs associated with non-compliance come in various forms such as:
– High collection costs, as well as possible legal fees
– Time wasting
– Court cases that may affect the image of the business
– Extra costs in additional tax and penalties .
To avoid such costs, valued clients are advised to:
– Keep proper records
– Adhere to due dates for payment of taxes and submission of returns
– Declare the correct amount of taxable income in their tax returns.
– Pay the correct amount of tax
Benefits of voluntary compliance
Benefits are mainly derived from proper record keeping. Section 37B of the Income Tax Act (Chapter 23:06) and Section 57 of the Value Added Tax Act (Chapter 23:12), for example, provide for this legal requirement.
These benefits are:
– The information kept by businesses is used to effectively manage these businesses as well as check and show company performance.
– Business efficiency is also derived from good record keeping.
– When business systems are up to date and properly managed, there is improved decision making.
= Updated records enable a clear assessment of the current business affairs of the company.
= Proper records facilitate audits and reduce the time taken by auditors.
Records can be maintained in either manual or automated form.
The law requires that all records be kept in the English language.
It should be noted that there is a significant advantage in automated record keeping over manual records, although manual records provide an effective back up in the event of system failure.
Our valued clients are reminded that VAT for the month of December 2015 is due on January 25, 2016 and ITF 16 for 2015 is due on or before 31st January 2016.
This article was compiled by the Zimbabwe Revenue Authority for information purposes only.
ZIMRA shall not accept responsibility for loss or damage arising from use of material in this article and no liability will attach to the Zimbabwe Revenue Authority.
To contact ZIMRA:
Visit our website: www. zimra.co.zw. Follow us on Twitter: @Zimra_11. Like us on Facebook: www.facebook.com/ZIMRA.11
Send us an e-mail: [email protected]
Call us (Head Office): 04 –758891/5; 790813; 790814; 781345; 751624; 752731
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