Types of Tax payable by persons in Zimbabwe.

Are you thinking of moving to Zimbabwe or investing in Zimbabwe. We have compiled a list of taxes that you will likely to experience.

The taxes are levied by the following legislation.

• The Income Tax Act [Chapter 23:06]
• The Value Added Tax Act [Chapter 23:12]
• The Capital Gains Tax Act [Chapter 23:01]
• The Finance Act [Chapter 23:04]
• The Estate Duty Act [Chapter 23:03]
• Customs and Excise Act [Chapter 23:02]

Taxes charged in terms of the Income Tax Act.

The Income Tax Act oversees the following taxes.

Corporate Income Tax.

Tax on business income . Levied at 24% plus 3% Aids levy.

Provisional Tax

This is part of Corporate tax paid in Quarterly Payments Dates (QPD’s).

1st QPD is due on the 25th of March at 10% , 2nd QPD due on the 25th of June at 25%. 3rd QPD is due on the 25th of September at a rate of 30%t. 4th and final quarter is due on the 20th of December at a rate of 35%.

Aids Levy

It is levied at 3% on corporate tax and PAYE.

Pay as you Earn (PAYE) Tax

It is tax levied on employment income. It is a progressive tax, based on tax bands.

Withholding Taxes

Withholding taxes allows for the collection of taxes at source.

• 30% Withholding Tax on Contract Payments – Sect 80.

  • Withholding tax of 30% should be deducted from payments of more than ZWL$130,000.00 or US$ 1,000.000 per annum.

• Resident and Non-Resident Shareholders Tax – Sec 26 & 28

• The following should be withheld from dividends paid to non-resident shareholders and resident individuals, Partnerships and Trusts.
  • • Dividend from Listed Companies 10%
    • Dividend from all other companies 15%

• Non-Residents Tax on Fees – Sect 30 and 17th Schedule

  • Non-residents tax on fees are levied in terms of section 30 A.R.W the 17TH Schedule of the Income Tax Act.
  • Every payer of fees to a non-resident person shall withhold non-residents’ tax on fees from those fees
  • The withholding tax rate is 15%.

• Non-Resident Tax on Remittances – Sect 31 and 18th schedule

  • Non-resident person who effects any remittance in respect of allocable expenditure shall in relation to such remittance pay non-residents’ tax on remittances.
  • The rate of the withholding tax is 15%.

• Non-Resident tax on royalties – Sect 31 and 19th schedule

  • Non-residents tax on royalties are levied in terms of section 31 as read with the 19th Schedule of the Income Tax Act.
  • The withholding tax rate is 15%.

• Resident Tax on Interest – Sect 34 & 21st schedule

  • 15% should be withheld from interest paid by a financial institution on loans and deposits and income from Treasury Bills, Bankers Acceptances and instruments traded by financial institutions.
  • 5% should be withheld from interest on fixed term deposits for at least 90 days.

• Non-Executive Directors Fees – Sect 36J

  • 20% should be withheld from payments to resident and non-resident non-executive directors who are not subject to PAYE.
  • 20% withholding tax is the final tax.

 

Intermediated Money Transfer Tax (IMTT) – Sect 36G a.r.w 30th Schedule.

• IMTT is deducted by financial institution e.g banks, building societies, RBZ, POSB or the Infrastructure Development Bank of Zimbabwe, Agribank, licensed postal company, provider of a mobile banking service, an operator of a mobile money transfer platform.
• It is tax levied on each transaction involving the “transfer” of money physically, electronically or by any other means takes place, other than a cheque.
• The transaction can be between 2 persons or from 1 person to 2 or more persons or from 2 or more persons to 1 person.

Presumptive Tax