In a significant move to tighten tax regulations, Zimbabwe’s Finance Ministry has proposed amendments to the regulations governing the deferment of Value Added Tax (VAT). These changes introduce new penalties aimed at ensuring that businesses and individuals promptly adhere to their tax obligations, reduce tax evasion, and enhance revenue collection.The proposal introduces two key penalties. First ...
New VAT Exemptions on Livestock Products
In a significant move aimed at bolstering economic growth and improving the affordability of essential goods, Zimbabwe has announced substantial reforms to its Value Added Tax (VAT) system, exempting certain products from VAT effective 1 August 2024. This article explores the details of this shift, explaining the intricacies of moving from standard-rated to exempt goods, the motivations behind the ...
Your Tax Obligation When Working for a Foreign-Based Employer
The digitalisation of work, accelerated by the COVID-19 pandemic, has enabled people to work globally, often for foreign-based employers while residing in their home countries. This shift offers numerous advantages, such as access to a diverse talent pool and potential cost reductions for employers. However, it also introduces complex tax implications for employees residing in Zimbabwe. This artic ...
VAT on Imported Services
The Value Added Tax (VAT) on Imported Services (VIS) in Zimbabwe ensures that services procured from non-resident persons and persons operating their business outside Zimbabwe and consumed by residents are taxed similarly to those supplied by local providers. This article explores the background, relevant laws, detailed VAT regulations, and the impact of VIS on businesses and the economy.VIS appli ...
VAT implications of Non-Profit Making Organisations
The VAT status of non-profit making organisations is a nuanced aspect of tax law that requires careful consideration and understanding. While these organisations often benefit from income tax exemptions due to their non-profit nature, the rules around Value Added Tax (VAT) are slightly different. This article explores the specific exemptions, the practical complexities of these rules and the broad ...
The New Face of Income Tax Computation
The introduction of Section 37AA of the Income Tax Act (ITA) through Finance Act No. 8 of 2022, and the mandate to lodge income tax returns via the Tax and Revenue Management System (TARMS) in Zimbabwean dollars (ZiG), has significantly transformed the landscape of income tax computation in Zimbabwe. This transformation presents both new challenges and complexities, requiring a deep understanding ...
Schemes of Reconstruction and Capital Gains Tax
In Zimbabwe's dynamic corporate finance sphere, schemes of reconstruction serve as vital mechanisms, particularly in an environment marked by frequent and impactful economic transformations. These schemes, which include mergers, takeovers, consolidations, and conversions, provide structured pathways for businesses to optimize operations and strategic alignment while minimizing tax burdens. Specifi ...
Independent Contractors from a taxman’s perspective
An independent contractor is a person or entity contracted to perform services for another entity as a non-employee, which offers a higher degree of autonomy than traditional employment. Contractors decide their own work hours, methods, and often juggle multiple clients. They shoulder their own business expenses and must supply their own tools and resources. As non-employees, independent contracto ...
Aligning Tax Laws with IFRS 17: Implications for Insurance Sector
IFRS 17, issued in May 2017, replaces IFRS 4, governing accounting for insurance contracts from 1 January 2023. It shifts from a premium-centric to a service delivery and risk release model, aiming for a more accurate reflection of insurer performance and revenue recognition timing. It further standardizes reporting with expected value and current value measurement principles, enhancing transparen ...
Input Tax and Fiscalisation.
The concept of input tax serves as a critical mechanism for tax recovery by businesses engaged in the production of taxable supplies. Input tax is defined as the VAT incurred by a registered operator when acquiring or importing goods and services used in business operations that generate taxable outputs. The eligibility to claim back this tax is contingent on strict adherence to regulatory require ...