What is Value Added Tax (VAT).

VAT is an indirect tax charged on consumption. In Zimbabwe, VAT, currently levied at 14,5%. With effect from 1 January 2023, VAT will be levied at 15%.

VAT Registration in Zimbabwe.

Section 23(1)(a) of VAT Act,as read with Finance Act No. 8 of 2022, taxpayers are required to register for VAT if their income is over or is expected to exceed US$40,000.00 or the local equivalent at the time of registration https://lucent.co.zw/what-are-the-requirements-to-for-vat/tax/.

Taxpayers can opt for voluntary registration for VAT even if the income is not expected to exceed US$40,000 threshold. Operators who supply VAT exempt items are not required to register for VAT.

Who Charges VAT?

Registered operator charge VAT on supply of goods and services. Registered operators are persons registered for VAT. VAT is also charged on importation of goods and services.

Who is liable for payment of VAT?

Liability for the payment of the tax to ZIMRA falls on the registered operator, the importer or the recipient in the case of the imported services. VAT shall also be chargeable on all excisable goods manufactured in Zimbabwe on the value for excise purposes plus the excise duty or any other amount as may be determined
by the Minister.

Deemed Supplies in VAT.

VAT Act provides for both actual and deemed supplies of goods or services. The deeming provisions both widen the range of transactions subject to VAT and clarify the fact that certain transactions are indeed taxable.

Below are transactions that are deemed supplies and are therefore chargeable with VAT at the rates applicable.

1. Sales in Execution of a Debt
   1. Goods sold towards satisfaction of a debt owed by that a person and the said person has not notified the person selling seller that those goods are not taxable or would not have been taxable had they been sold by him. Such goods shall be deemed to be a supply in the normal course of trade and therefore taxable.

2. 1. Where a person ceases to be a registered operator, he that is deemed to make a supply of the assets of his business a day prior to de-registration.