Tax Compliance in Zimbabwe.

Did you know that you can avoid unnecessary penalties and interest by following basic tax and duty compliance requirements? Tax compliance is important for your business.

Statutory Requirements for Corporate Income Tax.

Income Tax is tax levied on the profits of a business at 24% plus 3% Aids Levy. This tax is paid every quarter based on projected business profits.

Obligations under Corporate Income Tax.

• Every company is required to register with ZIMRA within 30 days of incorporation or registration with the Registrar of Companies.
• A copy of the memorandum and articles of association constituting the company are required to be filed with the Commissioner General of ZIMRA, within 30 days of the company’s incorporation or registration under any law;
• Appoint a representative / Public Officer who will represent the company, should be a Zimbabwean resident and is registered with ZIMRA.
• Client needs to open a bank account before registration with ZIMRA. A bank clearance letter is provided by ZIMRA to facilitate the opening of the bank account.
• Adhere to Quarterly Payment Dates (QPDs) by estimating the Provisional Tax at the beginning of the year then charge 24.72% (aggregate tax rate inclusive of Aids Levy) tax on this estimated taxable profit.
• The resultant tax is paid in four annual installments as;
  • • 25 March @ 10%
    • 25 June   @  25%
    • 25 Sept   @  30%
    • 20 Dec    @  35%
• Submit ITF12B (a return for Provisional Tax payments) when making payments under QPDs).
• Submit an Income Tax return (ITF12C) on-line using ZIMRA’s e-services platform when it is due.

Non-compliant Costs.

• Civil penalties for failure to submit returns.
• Time wasting;
• Court cases that may affect the image of the business;
• High collections costs, as well as possible legal fees; and
• Extra costs in additional tax and penalties that may negatively affect cash flows.

To avoid such costs, businesses should;

• Keep proper records;
• Adhere to due dates for payment of taxes or submission of returns;
• Pay the correct amount of tax; and
• Declare the correct amount of taxable income in their tax returns.