Tax Highlights from 2023 National Budget.

Major Tax Highlights extracted from the Finance Bill.

Value Added Tax

• With effect from the 1st January, 2023, General Rate of VAT reviewed up from 14.50% to 15.00%.
• Virtual Fiscalisation System – Insertion of new Section 68CC, creating an electronic platform to enable the electronic recording by taxpayers of transactions. 
• Amendment of section 16 (Permissible deductions in respect of input tax) – application of a rate of exchange. 
• Offsetting of export taxes against output VAT now prohibited.

Income Tax

• Tax brackets for income tax
  

  Section	Annual Amount (ZWL)	Percentage
  14(2)(a)(i)	Up to $900 000	0
  14(2)(a)(ii)	$$900 001 to $1 716 000	20
  14(2)(a)(iii)	$1 716 001 to $3 120 000	25
  14(2)(a)(iv)	$3 120 001 to $5 760 000	30
  14(2)(a)(v)	$5 760 001 to $12 000 000	35
  14(2)(a)(vi)	$12 000 001 and more	40

• Amendment of the definition of “licensed investor”- means the holder of an investment licence, other than the holder of such a licence
  whose licensed activity is mining.
• Amendment of Section 15, expenditure qualifying for deduction to be a fiscal tax invoice.
• Insertion of PART IIIA , dealing with Registration of Traders.
• Registrable taxpayer, person earning income from trade liable to register.
• Prescription and registration of registrable taxpayers.
• Revision of Penalties on non compliance
• The penalty for late submission of tax returns reviewed to US$30 payable at local currency equivalent for each day the return remains outstanding from the current ZWL30.00.
• Cumulative penalty over a period not exceeding ninety days of thirty United States dollars or its equivalent in Zimbabwe dollars for each day.
• Limiting accumulation of tax debts, interest rate on local currency tax debts reviewed from 25% to 200%, with effect from 1 December 2023.
• The interest rate on foreign currency tax debts will, however, remain at 10% per annum.
• Amendment of section 72, Payment of provisional tax, accepting a date, other than the end of a year of assessment.
• Exemption of investors in REIT.
• Unredeemed capital allowances as at 1 January 2023 be rebased to the local currency equivalent of the outstanding foreign currency invoice value at the beginning of each financial year.

Intermediated Money Transfer Tax (IMTT).

• With effect from the 1st January, 2023, IMTT on local domestic transfers reviewed from 4% to 2%.
• 2% continue to apply on ZWL transaction transfers.
• Exemption the transfers from Designated Special Purpose Accounts created for the delivery of projects by Implementing Partners of organisations covered under the Privileges and Immunities Act from 21st March, 2021. 
• Exemption the transfer of funds to farmers, for the purchase of wheat by private off-takers approved by the Agricultural Marketing Authority from 1 September to 31 March 2023.

Capital Gains Tax

•  Capital gains withholding tax on sale of any marketable security held less than 275 days, 4%.
•  Capital gains withholding tax on sale of any marketable security held more than 275 days, 1.5%.

Custom and Excise Duty

• With effect from 1 January 2023, the flat rate of excise duty on energy drinks reviewed upwards from US$0.05 cents per Litre to US$0.10 per Litre, 
• With effect from 1 January 2023, products exported in bond will now be electronically sealed.
• Exports in bond will now be consigned through Designated Routes from the point of loading to Ports of Exit, with effect from 1 January 2023.
• Exportation period for goods under bod reduced to 5 days, with effect from 1 January 2023.
• Suspension of duty on capital equipment imported by tourism operators replaced with suspension of duty on specified capital equipment imported by approved tourism operators.
• The minimum value of capital equipment to be imported under suspension of duty is now pegged at US$25 000 with effect from 1 January 2023.
• Rebate of Duty Facility on goods imported by operators in Special Economic Zones now limited to operators who meet the qualifying degree of export orientation, in line with the provisions of the income tax legislation with effect from 1 January 2023.
• Legislation relating to suspension of duty on specific mine development operations repealed in line with the Ease of Doing Business Concept, with effect from 1 December 2022.

Stamp Duty.

•  Amendment of section 2, With effect from the 1st January, 2023.
• “Stamp” means a stamp impressed by means of a die or an adhesive stamp, or an electronic stamp in the form approved by the Commissioner.
• Physical stamping of brokers notes have been replaced with an e-Generated Brokers Notes

Other Tax Changes.

• Minimum threshold for the deferment facility has been reviewed from the current US$ 500 000 to US$ 1 million, with effect from 1 January 2023, in order to mitigate revenue loss to the Fiscus.

Disclaimer.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.