What is a Tax Clearance Certificate (ITF263) in Zimbabwe?

To show that a business is compliant with taxes, ZIMRA issues a certificate to taxpayers. A tax clearance certificate is a document of compliant from ZIMRA.

How do I get a Tax Clearance Certificate from ZIMRA?

Tax clearance certificate is issued to the taxpayer upon request to a person whose tax affairs are up to date or has made satisfactory tax compliance arrangements with ZIMRA.

What do i need to get a Tax Clearance Certificate?

• Be registered with ZIMRA.
• Submit returns on time.
• Pay your taxes on time.
• Make payment plan on overdue tax.

Why is the Tax Clearance Clearance Certificate important?

Businesses do not operate in vacuum,as the taxpayer interacts with other businesses, tax clearances improve the taxpayer’s compliance profile. Listed below are advantages of having a valid tax clearance certificate.

• When payments are made for goods and services, no 30% withholding tax is deducted.
• No Presumptive tax is levied when importing goods.
• Most tenders require a valid tax clearance when bidding.
• When applying for local authority licenses, a Tax Clearance Certificate is mandatory.
• Businesses are comfortable doing business with compliant taxpayers.

Who qualifies to get a Tax Clearance?

Tax clearance certificate  is available for anyone who is liable to pay any form of tax to ZIMRA. This includes both individuals and companies.

• Individuals or companies that have paid or submitted tax returns and are up to date with their payments.
• Newly registered companies that want to trade with tax clearance certificate requiring businesses but have not yet paid tax to ZIMRA.

Disadvantages of not having a valid Tax Clearance certificate?

• It shows that your business in non compliant with ZIMRA Laws.
• 30% withholding tax will be withheld when payment is made to your account.
• It reduces the performance of the business.
• Nonpayment of tax can result in interest being levied at a rate of 10% per annum plus penalties of up to 100%
• Interest can be compounded indefinitely as the Tax laws specifically allow cumulative interest to exceed the original capital amount.
• The Commissioner has been given the power to attach and auction property in cases of nonpayment of duty or taxes.
• The powers also cover areas such as failure to furnish any return or information in connection with a tax liability within the time allowed and where the Commissioner is not satisfied with the return or information supplied.
• ZIMRA also has power to garnishee bank accounts to recover any unpaid taxes.

Learn more about the 30% withholding tax on , https://lucent.co.zw/what-is-30-withholding-tax/tax/. Browse through our compliant article;https://lucent.co.zw/why-your-business-should-be-compliant-with-zimra/business/