Everything a small business needs to know about taxes in Zimbabwe.

Published: 30 November 2022

Everything small business needs to know about taxes in Zimbabwe.

Many small business owners and start-ups think they are beneath ZIMRA scrutiny. Tax is a strange, foreign world, and so it’s easier to just ignore the whole thing.To ensure your small business’s success however, it’s important that you don’t end up on the wrong side of ZIMRA.

  • As your business grows, you need to obtain an ITF263 Tax Clearance Certificate. As growth expands, better customers emerge and the business start attracting top-notch employees. You will need proof that your business is tax compliant.
  • It’s cheaper to do things right. It’s much easier to get the right foundations in place now, than to try and fix things down the line.
  • Avoid penalties, interests and additional taxes. You also don’t want to fall on the wrong side of ZIMRA because you didn’t know what you should and shouldn’t be doing.

This basic guide outlines what you need to know about Income Tax,Value Added Tax, Withholding Taxes to boost your small business tax knowledge. In case you need to know more get in touch with us for professional tax advice.

Income Tax

Income tax is governed by the Income Tax Act [Chapter 23:06] together with the charging act, known as the Finance Act [Chapter 23:04] . Income Tax is a tax on a person in respect of his income during a tax year Income tax is split into corporate tax , investment Income and Pay As You Earn (PAYE).

Corporate Tax

  • Tax on business income (profits).
  • Levied at 24% plus 3% Aids levy
  • Effective tax rate becomes 24.72%
  • It is settled as Provisional Tax under Quarterly Payments Dates (QPD’s)
  • QPD’s are settled quarterly in a year as below
Quarter Due Date Percentage
1st QPD 25th March 10%
2nd QPD 25th June 25%
3rd QPD 25th September 30%
4th QPD 20th December 35%
  • ITF12C is submitted on or before the 30th of April every year.
  • ITF12B for submission of QPD’s

PAYE

  • A withholding tax charged on salaries ( income) payable to employees.
  • Every business person who becomes an employer is required to apply to register for PAYE within 14 days of becoming an employer.
  • Due on or/ before the 10th of each month.
  • P2 return submitted monthly.
  • ITF16 submitted on or / before the 30th of January every year.

Value Added Tax.

  • Your business only needs to register for VAT if your taxable supplies exceeds US$40,000.00 in value within a 12-month period.
  • Keeping accounting records for a period of at least six (6) years after the tax period to which the period relates.
  • Completing and submitting VAT returns.
  • Calculating and remitting the VAT due to ZIMRA on or before the due date.
  • Issuing tax invoices for any taxable supply.
  • Comply with fiscalisation regulations.
  • VAT 7 return submitted online.

 

 

 

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