adminRevenue Authority (Zimra).
Unless a payee furnishes the paying officer with a tax clearance certificate, any person who enters into a contract (whether for goods or services) of US$250 and more involving a single transaction or multiple transactions should comply with this legal requirement.
The amount withheld should be remitted to the Commissioner-General of Zimra on or before the 10th day of the month following that in which the payment was made. The payment should be accompanied with a schedule showing all names of the persons from whom the 10 percent was deducted and attached to the prescribed form (Rev 5 Form) and submitted to Zimra.
Any paying officer, who has withheld any amount, should furnish the payee concerned with a certificate, in a form approved by the Commissioner-General of Zimra and should clearly show the amount withheld. The Commissioner-General of Zimra is supposed to retain any amount remitted to him until the income tax payable by the payee, for that year of assessment has been assessed. The amount is normally allowed as a credit against the income tax payable by the payee. Where the amount exceeds the income tax so payable by the payee, the Commissioner-General of Zimra will refund the excess to the payee or may be set off against other tax liabilities.
Any person who fails to deduct the 10 percent withholding tax is liable for the payment of the amount due and a 100 percent penalty is chargeable on the amount due.
Exceptions to the Requirement to
Withhold the 10 percent
The exceptions include the following:
l Amount paid in terms of an employment contract.
l Sales affected in any shop in the ordinary course of the business of the shop. This caters for sales by retailers or wholesalers to consumers.
l An agreement for the settlement of a delictual claim against the State or a statutory corporation.
l Payments for the supply of farm produce and livestock by farmers.
What is normally required before a Tax Clearance Certificate is Issued?
The following are the main requirements to be met before a tax clearance is issued:
l The client should submit the return(s) (if applicable) in terms of Section 37 of the Income Tax Act (Chapter 23:06) or should have made arrangements satisfactory to the Commissioner-General for the furnishing of such return.
l Where applicable, payment of the appropriate presumptive tax in terms of the Twenty-Sixth Schedule to the Income Tax Act. (Chapter 23:06)
l In the case of new or proposed company or private business corporation, the client should appoint a public officer in terms of Section 61 of the Income Tax Act. (Chapter 23:06)
l Furnishing any return required to be furnished under any of the Acts administered by Zimra or making arrangements satisfactory to the Commissioner-General of Zimra for the furnishing of such returns.
l Payment of the appropriate tax in terms of any of the Acts administered by the Zimbabwe Revenue Authority.
Does a trader require a tax clearance in order to conduct any business?
l It is not a precondition for anyone to first present a tax clearance before entering into business agreements, transactions or arrangements. A trader is free to trade with any person with or without a tax clearance certificate. However, as already stated above, any payer who enters into a contract of US$250 and more involving a single transaction or multiple transactions should withhold the 10 percent withholding amount if no such tax clearance is presented.
l No fee is charged for the issuance of the tax clearance certificate and you are encouraged to report to the police any incidents of people purporting to be Zimra officers and charging any such fees.
l Article submitted by the Zimbabwe Revenue Authority. To contact us:
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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