Legal ways to reduce your tax liability with ZIMRA.

Did you know that you can legally reduce your tax liability with any tax administrator. Though there are various ways in the Zimbabwean Tax Legislation that businesses may you use to avoid paying more than necessary taxes. We are going to focus on only 5 simple ways for your business to legally reduce your tax liability. These ways are known as tax planning.

1. Timely Filing of Tax Returns

ZIMRA penalizes taxpayers for failing to file some tax returns on time and this creates an additional unnecessary cost to the business.This can be avoided by simply filing the relevant tax returns in time even though the company is experiencing some cash flow problems as future outflows would have been saved. Tax due dates
should therefore be observed.

Due dates for taxes are as below.

Tax Head	Due Date
Employees’ Tax (PAYE)	By the 10th of the following month.
Business Income: Quarterly Payment dates (QPDs) 1st QPD (10%) 2nd QPD (25%) 3rd QPD (30%) 4th QPD (35%)	25th March 2023 25th June 2023 25th September 2023 20th December 2023
Withholding Taxes: Non-Resident Shareholders’ Tax Resident Shareholders Tax Non-Resident Tax on Fees Non-Resident Tax on Remittances	Within 30 days of the date of distribution. Within 10 days of the date of distribution. Within 10 days of the date of payment. Within 10 days of the date of remittance.

Resident Tax on Interest	Payable by the 10th day of the month following the month of deduction.
Non-Resident Tax on Royalties	Within 10 days of the date of payment.
Automated Financial Transactions Tax	By the 10th day of the month following the month in which the transaction was affected.
Presumptive Tax: 1st Quarter (January to March) 2nd Quarter (April to June) 3rd Quarter (July to September) 4th Quarter (October to Dec)	No later than the 10th day of the month following the month in which the proceeds are received 10th April 2023 10th July 2023 10th October 2023 10th January 2024
Demutualization Levy	Within three months after issuing the Zimbabwean member concerned the free shares.
Tobacco Levy	48 hours after the date of the auction of tobacco concerned or after relinquishing possession of auction tobacco concerned.
Intermediate Money Transfer Tax	By the 10th day of the month following the month in which the transaction was effected.
Withholding Amounts under contracts with suppliers	On or before the 10th day of the following month after payment.
Non- Executive Directors’ Fees	Within 10 days of date of payment of the fees.
Property of Insurance Commission Tax	By the 10th day of the month following month of
Mineral Royalties	No later than the 10th day of the month following the month in which the proceeds are received.
Capital Gains Withholding Taxes	No Later than the 3rd working day from the date when the payment was made.
VAT	By the 25th day of the following month after the end of the tax period.
Deferred VAT	From a minimum of 90 days up to a maximum of 180 days from date of deferment depending on the Value of the goods.
VAT on imported services	Within 30 days of the earlier of time an invoice is issued by the supplier or recipient or the time any payment is made by the recipient in respect of that supply
Stamp duty	By the 10th of the following month.
Betting Tax	By the 25th of the next month.

2. Paying Taxes on / before due date.

When the situation permits, it is advised to pay all taxes well before the due date. In the event that the due date falls on a weekend such as
Sunday when the revenue authority offices are closed or on a holiday. The law silently stipulates that the due date is a day preceding the
holiday or such non-working day.A penalty in Zimbabwe for late payment of tax is 100% of the principal amount.

3. Utilization of Tax Credits

For the purpose of reducing one’s actual tax liability, a taxpayer should claim all available tax credits as per legislation. Tax credits are common with
employment income or taxation for individuals. Some credits are as below

• • Physical and mental disability
  • Blind person’s credit
  • Elderly person’s credit
  • Medical expenses credit
  • Medical contributions

4. Capitalizing on Tax Exemptions 

Tax exemptions are clear and straight-forward. These are incomes which are exempt of tax.The simplest way of avoiding tax is by making reference to the 3rd
Schedule to the Income Tax Act which exempts such amounts from tax.

5. Capital Allowances 

Section 15 as read with the 4th Schedule to the Income Tax Act permits a taxpayer who acquires or purchases a new or unused article, implement or machinery to claim capital allowances. The taxpayer may elect to claim either Special Initial Allowance or the Wear and Tear.

Disclaimer. The measures are clearly stated in the legislation, the author is not encouraging tax evasion.