Show organisers required to pay tax for foreign artists

Angela Sibanda, Showbiz Correspondent
EVER wondered why some shows are hyped up, and then cancelled at the last minute without a clear explanation?
One of the reasons is that promoters neglect to get tax clearance for artistes.

Show organisers that bring foreign acts to perform in the country are required to pay tax for them before the 10th day of the month after the performance, the Zimbabwe Revenue Authority (Zimra) has said.

The process starts with getting a tax clearance for the visiting artistes.

According to a statement that the authority issued recently, any contractor who wishes to obtain a tax clearance for a foreign artist should submit their application to Zimra together with a clearance letter from the National Arts Council of Zimbabwe (NACZ) and copies of the current passport of the foreign artist before the show is held.

Promoters are also required to provide a copy of the signed contract between them and their client, dated and stamped by the NACZ, payment details and proof of payment made by the music promoter to assist in the calculation of the tax to be paid.

Zimra defined a foreign artist as any non-resident entertainer who is contracted to perform in Zimbabwe, and revealed that these are obligated to have clearance letters to perform with the assistance of their contractor, who would have invited them.

The Zimbabwean Income Tax Act of 1967 states that all payments made to foreign artists for their work are subjected to Withholding tax (WHT)

The Withholding tax can be simply understood as a percentage, which is deducted from payments due to suppliers that do not possess a valid tax clearance by the payer for remission of the deducted funds to Zimra.

It is meant to ensure that all business people, in this case music promoters, pay tax.

“Payments made towards foreign artists are subject to Withholding Tax according to Section 80B of the Income-tax Act (26:06) at the rate of 15%. Payment means payment by cash, barter, set-off, crediting a director’s loan account, intercompany debits and credits or other settlement of obligation or whatsoever and in any form.

“A contractor has the obligation of withholding the tax and shall pay each amount so withheld to the Commissioner on or before the 10th day of the month following that in which the payment was made or within such further time the Commissioner may allow”, reads the statement.