adminAll registered business operators – including Government, quasi-government and statutory corporations – who enter into any contracts which result in an obligation to pay any amounts totalling or aggregating US$250 or more are required to withhold 10 percent of each amount payable to payees without valid tax clearance certificate (ITF 263).
Tax clearance certificates will be issued only to clients who are fully paid up and have furnished returns required to be furnished under any of the scheduled Acts on the last date or occasion on which such return was due.
Where the registered operator has furnished a valid tax clearance confirming that his/her tax position is satisfactory, there is no need for the payer to withhold the 10 percent.
Please note that tax clearance certificates will be issued for two tax periods during the tax year.
The first will be valid from date of issue to 30th June 2012 while the second will be valid from 1st July to 31st December of the same year.
The amount remitted to Zimra is retained until such time that the payee has been assessed for the respective tax year at which time the amount is allowed as a credit against any tax due. Any excess is refunded to the payee.
The registered business operator is obliged to do the following:
- Deduct 10 percent of the amount to be paid where the payee has not submitted a valid tax clearance certificate on form ITF 263.
- Remit the deducted amount to Zimra on or before the 10th day of the following month.
- Retain a copy of the tax clearance certificate furnished by payee for tax purposes.
- Furnish the person from whom the amount has been withheld (payee) with a certificate showing full details of payee including the amount withheld.
- Where in doubt of the validity of the tax clearance certificate, verify with list published on the Zimra website.
The registered business operator is liable for the amount that he/she has failed to withhold and is liable to a penalty equal to the amount that was not withheld.
Interest is also payable on the outstanding amount as long it remains unpaid. There are some exceptions to this requirement to withhold 10 percent on the amounts paid under contract. These include the following transactions: Amounts paid in terms of employment contracts.
Sales effected in any shop in the ordinary course of the business of the shop and any other consumer contracts for the sale or supply of goods or services or both in which the seller or supplier is dealing in the course of business and the purchaser or user is not in business. This caters for sales by retailers or wholesalers to consumers.
Payments for the supply of farm produce and livestock to farmers are also exempt from the need for the amount to be with- held.
There is therefore no need to ask for tax clearances in such cases. Note that payments for farm produce to persons who buy for resale such as traders, retailers and wholesalers are still subject to the withholding amount requirements.
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
Corner First Street/Kwame Nkrumah Avenue
PO Box 4360
Harare
Fax: 04 – 774087
Tel (Head Office): 04 -758891/5; 790813; 790814; 781345; 751624; 752731; 798879
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