adminIncome Tax
Income Tax legislation exempts from taxation ecclesiastical institutions. This covers the receipts and accruals of religious organisations.
Obligations as an employer
Like all employers, religious organisations are required to register with the Zimbabwe Revenue Authority (Zimra) within 14 days of becoming an employer. Pay As You Earn (PAYE) should be withheld from remuneration accruing to employees and should be remitted to Zimra by the 10th day of the following month. The remuneration includes the pastor’s stipend and other benefits like housing and motoring benefit.
Records in respect of remuneration paid should be maintained. Failure to comply with these requirements renders the organisation liable for payment of the outstanding PAYE, penalties and interest.
Leasing of buildings by religious organisations
Where rental income is received from a lessee who is an informal trader in respect of residential accommodation, premises or a place on which trade is carried on, the organisation is required to withhold an Informal Traders’ Presumptive Tax equal to 10 percent of the rental. This withheld amount should be remitted to the Commissioner General within 30 days from the date of such withholding.
Failure to recover or remit the Presumptive Tax renders the organisation itself liable for the payment of the outstanding Presumptive Tax, interest and penalties.
Withholding of amounts under contracts
Where the religious organisation enters into contracts for the supply of goods or services resulting in an obligation to pay amounts totalling US$250.00 or more, it should deduct 10 percent of the total invoice value and remit the amount to Zimra, unless the payee furnishes a valid tax clearance certificate confirming that their tax position is satisfactory.
Rebate of duty on goods imported for religious purposes
A rebate of duty is a duty-free concession provided for in the Customs and Excise (General) Regulations (Statutory Instrument 154 of 2001). One such rebate is granted to registered religious organisations upon the importation of the following items and subject to approval by the Commissioner General:
- Organs and blowers, harmonious and band instruments;
- Church decorations, altars, fonts, lecterns, pulpits, vestments and other appointments not being furniture;
- Illuminated windows; and
- Bibles, prayer books, hymn books, pictures, pamphlets, posters, charts, statues of a religious nature, crucifix, church vessels, incense and other religious articles as approved by the Commissioner General. Should such goods imported under rebate be sold or otherwise disposed of, the rebated duty becomes due and payable to Zimra.
Rebate of duty on goods imported for free distribution
Although this rebate is meant for charitable organisations, religious organisations designated by the Minister of Finance as relief organisations may also enjoy the rebate. This rebate of duty covers goods imported for free distribution to the needy. It excludes new clothing, footwear and bed linen. The goods have to be approved by the Commissioner General and should not be sold or disposed of without his written consent.
Rebate of duty on goods donated to associations and organisations
Religious organisations can also benefit from the rebate of duty on goods donated to them for use in charitable or welfare work.
The organisation and the goods must have been approved by the Commissioner General.
This rebate, however, is not granted in the following circumstances:
- Where the goods have been paid for with funds from local banking institutions or local branches of banking institutions registered and operating in Zimbabwe whether or not the funds were donated and payment is for freight;
- The importation of second-hand or used motor vehicles.
- The importation of new clothing, shoes and bed linen;
For further information, please contact your nearest Zimra office.
Article submitted by Zimra’s Legal and Corporate Services Division. Their contact details are as follows:
Zimbabwe Revenue Authority
Legal and Corporate Services Division
6th Floor, ZB Centre
Cnr First Street/Kwame Nkrumah Avenue
P O Box 4360, Harare
Tel: 04 – 758891-5/790813 Fax: 04 – 774087
E-Mail: [email protected]
Website:www.zimra.co.zw.
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