1. The Digital Evolution of Zimbabwe’s Tax Administration

The modernization of tax administration under the Zimbabwe Revenue Authority (ZIMRA) reached a historic milestone in late 2023 with the launch of the Tax Revenue Management System (TaRMS). Replacing legacy systems such as SAP R/3 and various disjointed online filing portals, TaRMS was introduced as a high-performance, user-friendly digital platform designed to automate and simplify tax processes. Its implementation aligns with national digital transformation goals, aiming to lower compliance costs for taxpayers, improve revenue collection efficiency, and reduce human intervention to combat corruption.

At the heart of the TaRMS architecture is the Single Business Account (SBA). This system consolidates all tax heads of a single taxpayer under one dashboard, linked directly to a unique Taxpayer Identification Number (TIN), which replaces the legacy Business Partner (BP) number. Under this system, taxpayers can manage registrations, file returns, execute electronic payments (e-Payments), and obtain Tax Clearance Certificates (ITF263) through a unified ledger.

Understanding which tax returns can be filed on TaRMS, the legal frameworks governing them, and the complex calculation rules—particularly in Zimbabwe’s unique multi-currency environment—is critical for corporate executives, legal practitioners, public officers, and small-to-medium enterprise (SME) operators.

2. Core Architecture of TaRMS and General Filing Workflows

Filing tax returns on TaRMS differs significantly from previous systems. Rather than submitting separate forms across multiple physical offices or disjointed web pages, the platform uses an online transactional engine.

The Single Business Account (SBA)

The SBA acts as a centralized clearing account. When a taxpayer logs into the TaRMS portal, they are presented with an overview of their liabilities, credits, and pending returns across all tax heads (such as Income Tax, VAT, PAYE, and Withholding Taxes). Any payment made to ZIMRA is credited to the SBA and can be allocated to specific tax periods or outstanding liabilities.

Currency Separation in Filing

Due to the dual-currency monetary system in Zimbabwe, TaRMS enforces strict separation of accounts. Under Section 4A of the Finance Act [Chapter 23:04], tax must be accounted for and paid in the currency of transaction. Therefore, the portal requires taxpayers to submit separate schedules or dual-ledger returns for:

• Zimbabwe Gold (ZiG) (the local currency, which replaced the ZWL and RTGS systems).
• United States Dollars (USD) (and other approved foreign currencies).

The Bifurcation of Return and Payment Due Dates (SI 81 of 2025)

A major reform was introduced via Statutory Instrument 81 of 2025 (Finance Regulations, 2025), effective 28th August 2025. SI 81 separated the due dates for submitting tax returns from the actual payment dates. Tax returns must now be submitted earlier than before to allow ZIMRA to process liabilities beforehand, while tax payments remain payable on their traditional statutory due dates. Any reference to the “Zimbabwe dollar” in any revenue acts is also legally construed to be a reference to the local currency (ZiG).

3. Major Tax Returns Filed on TaRMS

The TaRMS portal facilitates the online preparation, validation, and submission of several critical tax returns. Below is a detailed statutory and practical breakdown of each return type, updated with the new SI 81 of 2025 submission deadlines.

A. Value Added Tax (VAT) Returns (Form VAT 201)

Legal Framework

Value Added Tax (VAT) is levied under the Value Added Tax Act [Chapter 23:12], with the charging rates determined by Chapter IV of the Finance Act [Chapter 23:04].

Applicable Rates

Pursuant to the Finance Act 7 of 2025 (effective 1st January 2026), the standard rate of VAT is:

• Standard Rate: 15.5% on standard-rated supplies and importations.
• Cellular Telecommunications Services: 15% on the supply of cellular telecommunication services by registered operators.
• Betting and Gaming: Specific rates apply, such as 15% of gaming revenue for licensed casinos and 15% of banker’s revenue.

Filing Deadlines and Procedures

Under SI 81 of 2025, the return submission and tax payment dates are split:

• Frequency: Monthly.
• Due Date for Submitting Return: On or before the 10th day of the month following the end of the tax period (changed from the 25th).
• Due Date for Tax Payment: Remains on or before the 25th day of the month following the end of the tax period.
• Form on TaRMS: VAT 201 (or VAT 213 for VAT on Imported Services, also due for submission on the 10th).

Filing Mechanics on TaRMS

Registered operators must log into TaRMS and navigate to the VAT section of their SBA. The system requires the input of:

1. Output Tax: Total sales divided into local currency (ZiG) and foreign currency (USD). Users must calculate output tax at the statutory rate of 15.5% (or 15% for telecommunications).
2. Input Tax: Total zero-rated, exempt, and standard-rated purchases. Input tax deductions must be backed by valid fiscal tax invoices containing the supplier’s TIN, the buyer’s TIN, and a ZIMRA-approved fiscalization signature.
3. Apportionment: For businesses making mixed supplies (both taxable and exempt), input tax must be apportioned using the turnover method:

   Apportionment Fraction = Value of Taxable Supplies / Total Supplies

   If the fraction is 90% or more, the full input tax can be claimed; if less than 10%, no input tax is deductible.

B. Employees’ Tax / Pay As You Earn (PAYE) Returns (Form P2)

Legal Framework

Employees’ Tax is administered under the Thirteenth Schedule to the Income Tax Act [Chapter 23:06] and assessed using the progressive tax tables set out in the Finance Act [Chapter 23:04].

Applicable Tax Brackets (Tax Year 2025/2026)

Following the Finance (No. 2) Act 7 of 2024 and subsequent amendments, the monthly progressive tax brackets for employment income in Zimbabwe Gold (ZiG) are structured as follows:

Portion of Taxable Income (Monthly ZiG Equivalent)	Specified Tax Rate
Up to ZiG 2,800 (Annualized ZiG 33,600)	0%
ZiG 2,801 to ZiG 8,400 (Annualized ZiG 100,800)	20%
ZiG 8,401 to ZiG 28,000 (Annualized ZiG 336,000)	25%
ZiG 28,001 to ZiG 56,000 (Annualized ZiG 672,000)	30%
ZiG 56,001 to ZiG 84,000 (Annualized ZiG 1,008,000)	35%
Above ZiG 84,000 (Annualized ZiG 1,008,000)	40%

An additional AIDS Levy of 3% is charged on the calculated income tax liability, representing an effective top marginal rate of 41.2%.

Filing Deadlines and Procedures

Under SI 81 of 2025, the submission of employment tax returns must occur earlier:

• Frequency: Monthly.
• Due Date for Submitting Return (Form P2): On or before the 5th day of the following month (changed from the 10th).
• Due Date for Tax Payment: Remains on or before the 10th day of the following month.
• Forms on TaRMS: Form P2 (monthly remittance return) and Form P16 (annual tax return/reconciliation).

Filing Mechanics on TaRMS

Employers are required to upload a standardized payroll schedule containing:

• Individual employee names, National ID/Passport numbers, and TINs.
• A clear separation of earnings between ZiG and USD under the provisions of Section 4A(1).
• Applicable medical aid credits (deductible at the rate of ZiG 1 for every ZiG 2 paid to a medical aid society) and credits for elderly taxpayers (over 55 years) or disabled employees.

C. Corporate Income Tax (CIT) & Individual Income Tax from Trade

Legal Framework

Income tax is charged under Section 6 of the Income Tax Act [Chapter 23:06] at rates fixed in Chapter I of the Finance Act [Chapter 23:04].

Applicable Rates

• Standard Corporate Tax Rate: 25% (plus 3% AIDS Levy, resulting in an effective rate of 25.75%).
• Special Sectors:
  • Mining Companies: 25% (or 15% for Special Mining Leases).
  • Licensed Investors (Special Economic Zones): 0% for the first 5 years of operation, and 25% thereafter.
  • Business or Knowledge Process Outsourcing (BKPO) Services: 15% (effective 1st January 2026 under Finance Act 7 of 2025).

Filing Deadlines and Systems

Income tax compliance on TaRMS operates on two parallel filing tracks:

1. Provisional Tax Returns (Form ITF 12B) / Quarterly Payment Dates (QPDs)

Taxpayers must estimate their taxable income for the tax year. Under SI 81 of 2025, the return submission dates have been pulled back, while payment deadlines remain on the traditional dates:

• 1st QPD: Return submission due by 20th March | Payment due by 25th March (10% of estimated tax).
• 2nd QPD: Return submission due by 20th June | Payment due by 25th June (25% of estimated tax).
• 3rd QPD: Return submission due by 20th September | Payment due by 25th September (30% of estimated tax).
• 4th QPD: Return submission due by 15th December | Payment due by 20th December (35% of estimated tax).

Note: The currency of payment must strictly match the currency of trade under Section 4A dynamics. If a company transacts in both USD and ZiG, two separate ITF 12B returns must be compiled on TaRMS.

2. Annual Self-Assessment Returns (Form ITF 12C)

• Due Date: Generally 30th April of the year following the tax year (or as designated by ZIMRA Commissioner-General public notices).
• Filing Requirements: Detailed tax computation schedules, financial statements (which must be rebased to United States Dollars or ZiG in accordance with ZIMRA’s binding general rulings under Section 4A), and proof of withholding taxes suffered.

Capital Allowances Rebasing on TaRMS

Under Section 4A(11) and (12) of the Finance Act, unredeemed balances of capital allowances (Fourth Schedule of the Taxes Act) must be rebased to the local currency equivalent of the outstanding foreign currency invoice value using the official exchange rate or auction rate prevailing on the designated statutory transition dates (e.g., 1st January 2021 and 1st January 2023). This calculation must be declared in the asset depreciation schedules uploaded to TaRMS.

Tax Credits Management on TaRMS

During the annual ITF 12C filing, qualifying corporate taxpayers can claim specific credits:

• Youth Employment Credit (Section 13A): Deductible for employing additional staff aged 30 or below. Under Finance Act 7 of 2025, BKPO services enjoy a credit of up to $60,000 per annum.
• Physically Challenged Persons Credit (Section 13B): Allowed at the rate of $50 per month per employee up to an aggregate of $2,250 annually.
• Rural Sports Academy/Youth Sports Expenditure Credit (Section 13C): Effective 1st January 2026, corporate taxpayers can claim a credit up to $10,000 for sports development expenditures.

D. Capital Gains Tax (CGT) Returns (Form CGT 1)

Legal Framework

Capital Gains Tax is levied under the Capital Gains Tax Act [Chapter 23:01] and the Finance Act [Chapter 23:04] Chapter VIII. It is charged on the disposal of “specified assets,” defined as immovable property, marketable securities (shares, unit trusts, debentures), and intellectual property rights.

Applicable Rates

The rates depend heavily on the date of acquisition of the specified asset relative to the currency transition date of 22nd February 2019:

• Assets Acquired Before 22nd February 2019:
  • Rate: 5% of the gross capital amount (proceeds of sale). This is essentially a flat tax on the gross transfer value.
• Assets Acquired After 22nd February 2019:
  • Rate: 20% of the net capital gain (gross proceeds minus allowable deductions).
• Listed Marketable Securities: Subject to Capital Gains Withholding Tax of 1% (which acts as a final tax). For securities held for less than 180 days, an additional tax rate of 4% on the capital gain was re-legislated by the Finance Act of 2024.

Filing Deadlines (SI 81 of 2025)

• Due Date for Submitting Return (Form CGT 1): Within 15 days after the transaction date (sale date). (This is a reduction from the previous 30-day window).

Allowable Deductions on TaRMS (Section 11)

When filing a CGT 1 return for assets acquired after 22nd February 2019, taxpayers can deduct:

1. Acquisition Cost: The original purchase price.
2. Additions, Alterations, and Improvements: Costs incurred on the asset.
3. Inflationary Allowance: Determined by the CPI formula under Section 11(2)(c):

   Allowance = ((A – B) / B) * C

   Where:

   • A is the All Items Consumer Price Index at disposal.
   • B is the CPI in the month of purchase or improvement.
   • C is the purchase price or revalued amount.
4. Straight-Line Foreign Currency Deduction (Section 39A(9a)): Where the transaction is denominated in USD, the standard CPI indexation is disallowed. Instead, the taxpayer claims a flat 2.5% deduction per annum of the acquisition cost and improvement costs from the date of expenditure to the date of sale.

Filing on TaRMS for CGT Clearance (Section 30A / 32)

No transfer of immovable property or unlisted shares can be executed by the Registrar of Deeds or company secretary unless a CGT Clearance Certificate is issued by ZIMRA.

• The Workflow: The transferor or their legal practitioner (acting as a “depositary” under Section 22A) must file the CGT 1 return on TaRMS.
• Valuation Assessment: Under Section 14, if ZIMRA deems the declared sale price to be lower than the fair market price, the Commissioner-General may adjust the valuation. Once payment is processed through the SBA, the CGT Clearance Certificate is digitally generated and dispatched.

E. Withholding Taxes (WHT) Returns

Several withholding taxes must be declared and remitted through the TaRMS platform. These are generally managed by “withholding agents” who deduct the tax at source and remit it to ZIMRA.

                  +-----------------------------------+
                  |   WITHHOLDING TAXES ON TaRMS     |
                  +-----------------+-----------------+
                                    |
         +--------------------------+--------------------------+
         |                                                     |
+--------v------------------+                         +--------v------------------+
|    Resident WHT           |                         |  Non-Resident WHT         |
+--------+------------------+                         +--------+------------------+
         |                                                     |
         |-- Interest (5% / 15%)                               |-- Fees (15%)
         |-- Director's Fees (20%)                             |-- Royalties (15%)
         |-- Royalties (15%)                                   |-- Remittances (15%)
         |-- Dividends (10% / 15%)                             |-- Dividends (5% / 10% / 15%)
         +------------------+                         +---------------------------+

Filing Deadlines under SI 81 of 2025

With the implementation of SI 81 of 2025, almost all Withholding Tax returns must be submitted to ZIMRA earlier:

• VAT Withholding Tax Return: Due for submission by the 10th day of the following month.
• Other WHT Returns: (Contracts, Interest, Shareholders’ Tax, Non-Resident Royalties, Non-Resident Fees, Non-Executive Directors’ Fees): Due for submission by the 5th day of the following month (changed from the 10th or 15th).

Key Withholding Taxes Summary

1. Withholding Tax on Contracts (Section 80 of the Income Tax Act):
   • Rate: 30% of the contract value (effective rate increased from 10% by recent Finance Acts).
   • Trigger: When a registered taxpayer pays a supplier an aggregate over the statutory threshold in a year, and the supplier cannot produce a valid Tax Clearance Certificate (ITF263).
   • Submission: Must be filed on TaRMS by the 5th day of the following month.
2. Resident Shareholders’ Tax (Withholding on Dividends):
   • Rate: 10% for dividends from listed companies; 15% for unlisted companies (Section 17 of the Finance Act).
   • Submission: Filed on TaRMS by the 5th day of the following month.
3. Non-Resident Taxes (Fees, Royalties, Remittances, and Dividends):
   • Rates:
     • Non-Resident Shareholders’ Tax (Dividends): 10% (listed), 5% (Victoria Falls Stock Exchange listed), or 15% (unlisted) (Section 15).
     • Non-Residents’ Tax on Fees: 15% (Section 19).
     • Non-Residents’ Tax on Remittances: 15% (Section 20).
     • Non-Residents’ Tax on Royalties: 15% (Section 21).
   • Submission: Filed on TaRMS by the 5th day of the following month.
4. Tax on Non-Executive Directors’ Fees (Section 22J):
   • Rate: 20% of each dollar of fees paid to non-executive directors.
   • Submission: Filed on TaRMS by the 5th day of the following month.

F. Presumptive Tax Returns

Legal Framework

To tap into the informal sector, Section 36C of the Taxes Act, read with Section 22C of the Finance Act, levies flat-rate or percentage-based presumptive taxes on informal business operations.

Classifications and Rates on TaRMS

• Informal Traders: 10% of monthly rentals paid to landlords (who act as withholding agents).
• Transport Operators: Monthly flat rates per vehicle paid in ZiG equivalent of:
  • Taxicabs (up to 7 passengers): $35 per month.
  • Omnibuses (8 to 14 passengers): $50 per month.
  • Omnibuses (15 to 24 passengers): $60 per month.
• Hairdressing Salons: $5 per chair per month.
• Restaurants & Bottle Stores: $35 per month.
• Cottage Industries: $100 per month.
• Driving Schools: $50 per month (Class 4); $100 per month (Class 1 & 2).

Filing Deadlines under SI 81 of 2025

• Presumptive Tax (Informal Traders): Return submission due by the 5th day of the following month.
• Presumptive Tax (Other): Return submission due by the 15th day after the end of the quarter.

Transition to Self-Assessment (The 2025/2026 Shift)

Under the Finance Act of 2024 and Finance Act 7 of 2025, ZIMRA has instituted a policy shift designed to move businesses out of the presumptive tax bracket into full accounting compliance.

• Self-Employed Professionals: Registered architects, engineers, legal practitioners, health practitioners, and real estate agents who previously paid Presumptive Tax are now legally required to file Form ITF 12C (Self-Assessment).
• Large Transport Operators: Effective 1st January 2026, operators of large omnibuses (25+ seats), heavy goods vehicles (exceeding 10 tonnes), and commercial waterborne vessels are removed from presumptive tax schedules and must maintain books of accounts to file monthly VAT, quarterly QPDs, and annual ITF 12C returns on TaRMS.

G. Special Capital Gains Taxes

The latest fiscal bills have introduced highly targeted capital gains regimes to capture value from extractive industries and land-holding corporate maneuvers. These returns must be filed specifically on TaRMS.

1. Special Capital Gains Tax on Transfer of Mining Title (Section 30B)

Introduced w.e.f. 1st January 2024, this tax applies to transactions concluded both within and outside Zimbabwe where a “mining title” (claims, leases, special grants) or interest is transferred to an entity.

• Rate: 20% of the transaction value, payable in USD. However, if the transaction was approved by the Minister of Mines, the rate is reduced to 5%.
• Filing Deadline (SI 81 of 2025): Return submission is due within 15 days after the transaction date (sale date). The acquirer must submit an affidavit on TaRMS disclosing full transfer details, beneficial owners, and purchase considerations. No transfer of mining title can be executed without a ZIMRA clearance certificate.

2. Special Capital Gains Tax on Transfer of Shares in Land-Holding Entities (Section 30C)

Effective 1st January 2026, this tax targets off-shore or indirect transfers of Zimbabwean land. If a company, trust, or syndicate domiciled outside Zimbabwe owns land in Zimbabwe and transfers its shares, it triggers this special tax.

• Rate: 20% of the transaction value, payable in USD.
• Filing Deadline (SI 81 of 2025): Return submission is due within 15 days after the transaction date (sale date). Under Section 30C(5), if ownership of the land or shares is challenged in court, title is deemed untransferred unless a clearance certificate from TaRMS is produced.

4. Multi-Currency Accounting and Section 4A Dynamics

Perhaps the most challenging aspect of filing tax returns on TaRMS is complying with the multi-currency provisions of Section 4A of the Finance Act.

The “Currency of Trade” Rule

Under Section 4A, if a taxpayer earns income in USD, they must pay tax in USD. If they earn in ZiG, they pay in ZiG.

The 50% Rule (Finance Act 2024 Amendments)

Effective 1st July 2024, a major compliance policy was introduced. Where a company or trust receives or accrues more than 50% of its total income in foreign currency, the entity is statutory-deemed to have earned half of its income in foreign currency, and the other half in local currency. The entity must then calculate and pay its provisional tax (ITF 12B) on a 50/50 basis.

• Official Conversion Rate: For the half of the tax that must be converted, the payment must be made in local currency using the official interbank rate on the day of payment.
• TaRMS Enforcement: The TaRMS portal restricts filing options for entities whose monthly or quarterly disclosures reflect a USD turnover ratio exceeding 50%. The ledger automatically splits the payable amounts into USD and ZiG sub-accounts.

Liquidated Nostro Balances (Section 4A(10))

Where a taxpayer has their foreign currency receipts liquidated and paid in local currency under the Reserve Bank of Zimbabwe (RBZ) mandatory retention schemes, any tax due on that liquidated portion is calculated and payable in local currency (ZiG). Taxpayers must upload proof of bank liquidation onto TaRMS to justify paying that portion in ZiG.

5. Penalty Regimes, Civil Penalties, and Dispute Resolution

Filing returns on TaRMS is subject to strict automated penalty calculations. The system is designed to remove ZIMRA officers’ discretion in waiving penalties unless a formal objection is filed.

Late Filing Penalties

Failing to submit a return by its due date triggers automatic civil penalties on the SBA. For example, under Section 37 of Chapter VII (Mining Royalties):

• Failing to remit mining royalties attracts a primary civil penalty equal to double the royalty amount due.
• Continued default results in a secondary civil penalty of $30 per day of default, up to 181 days.

Additional Tax (Section 46 of the Taxes Act)

If a taxpayer submits an incorrect return or omits income to evade tax, ZIMRA can levy an additional tax of up to 100% of the under-declared tax amount. This assessment is generated directly in the TaRMS ledger.

Objections and Appeals (Part VI of the Acts)

Taxpayers aggrieved by an assessment, a penalty, or a decision made by the Commissioner-General on TaRMS (such as adjusting the fair market price of a specified asset under Section 14 of the CGT Act) can lodge a formal objection.

• Statutory Deadline: Within 30 days of the date of the assessment notice.
• The TaRMS Portal Objection Workflow:
  1. The taxpayer drafts a formal objection letter specifying the detailed grounds.
  2. The objection is submitted online through the “Dispute Resolution” module on TaRMS.
  3. The system records the objection and may suspend the “Pay Now” enforcement block, though interest continues to accrue on the disputed tax if the objection is eventually dismissed.
  4. If the objection is disallowed by the Commissioner-General, the taxpayer has the right to appeal to the Fiscal Appeal Court or the High Court within 30 days of the decision.

6. Practical Compliance and Best Practices for Taxpayers on TaRMS

To ensure smooth operations and avoid audit flags on the TaRMS platform, businesses and tax practitioners should implement the following best practices:

1. Reconcile Bank Accounts with the SBA: Regularly check the Single Business Account ledger on TaRMS. Ensure that payments made via electronic bank transfers are credited to the correct tax heads and tax periods. Keep in mind the separation of Return Submission Due Dates and Tax Payment Due Dates.
2. Ensure Fiscalization Integration: ZIMRA’s Fiscalisation Data Management System (FDMS) directly feeds sales data into TaRMS. Any mismatch between sales reported by your fiscal devices and the sales declared on your VAT 201 return will trigger an automatic audit flag.
3. Validate Supplier TINs: Before claiming input tax on VAT returns, use the TaRMS TIN verification tool to check if your suppliers are active and compliant. Claiming input tax from a suspended or unregistered supplier will result in ZIMRA disallowing the deduction.
4. Maintain Multi-Currency Records: Implement accounting software capable of tracking sales, purchases, and payroll on a transaction-by-transaction basis in both USD and ZiG. This is essential for defending your multi-currency tax splits during ZIMRA audits.
5. Utilize Tax Credits: Do not overlook statutory tax credits. Keep comprehensive records of your employees’ ages, medical aid contributions, and government hospital medical reports to support Youth Employment and Disability credits on your annual tax returns.

7. Conclusion

The introduction of TaRMS has transformed the taxation landscape in Zimbabwe from a slow, paper-based administrative process into a highly automated, ledger-driven digital ecosystem. By facilitating the online filing of VAT, PAYE, Corporate Income Tax, Capital Gains Tax, and Withholding Taxes under a single business account, the system has streamlined tax compliance.

However, the complexity of Zimbabwe’s tax laws—characterized by progressive multi-currency tax brackets, rebasing capital allowances, dynamic presumptive tax transitions, and new special capital gains taxes on mining and land assets—demands that taxpayers remain highly informed. With the implementation of SI 81 of 2025, return deadlines are significantly tighter, meaning that ultimate compliance on TaRMS relies on maintaining pristine, transaction-level accounting records that can be closed and filed rapidly.