ZIMBABWE REVENUE AUTHORITY PRESENTATION ON TAXATION OF THE MICROFINANCE INDUSTRY.

OBJECTIVES Why taxation Taxation of MICROFINANCE INDUSTRY Tax obligations and registration requirements Income Tax PAYE V.A.T Presumptive Tax Withholding Tax

WHY TAXATION Taxation is important as it provides the necessary funding for the country’s development. The following tax acts authorise ZIMRA to collect taxes for the benefit of the Consolidated Revenue Fund: Income Tax Act –(Chapter 23:06) VAT Act (Chapter 23:12) Capital Gains Act (Chapter 23:01) Finance Act (Chapter 23:04)

Who is required to register for tax purposes The following persons are required to register for tax purposes. Company Trust Individual Private Business Corporation Partnership Association, Cooperative etc

Documents Required for Registration: Individual Rev 1  Stamped current Bank Statement; Identity card Proof of residence in form of utility bills, support the utility bill with affidavit if not in your name.

Documents Required for Registration: Company Rev 1 Certificate of Incorporation; CR14: contains details of directors CR6: contains registered address of company Stamped current Bank Statement; Memorandum of Association (1st 3 pages plus the last page) Articles of Association (1st 3 pages plus the last page)

Company registration Cont’d Documents for at least 2 Directors Identity card; Proof of residence in form of utility bills, support with affidavit if bill is not in your name.

Company registrations cont’d Documents for the Public officer Letter of appointment as public officer, stating the name, ID Number, Residential address and a statement to the effect that the public officer is a signatory to the company’s bank account; Identity card Stamped current bank statement; Proof of residence in form of utility bills, support with affidavit if not in your name What is a Public Officer: is an official of the company who occupies a senior position in the company, and is a signatory to the company’s banks accounts, and is appointed by the company owners to represent the company on dealings with ZIMRA on tax purposes.

Documents Required for Registration: PBC Organisational Documents PBC 2: Stamped current Bank Statement; Payroll schedules if applying for the PAYE contract account Documents for the Member/s (2 if more than 1) Identity card Proof of residence in form of utility bills, support with affidavit if not in your name. Documents for the Public officer Letter of appointment as public officer, stating the full name, ID Number, Residential address and a statement to the effect that the public officer is a signatory to the company’s bank account; Stamped current bank statement; Proof of residence in form of utility bills, support with affidavit if not in your name

TAX OBLIGATIONS The main tax heads used for the collection of tax revenue are; Income Tax P.A.Y.E VAT Presumptive Tax Withholding Tax

INCOME TAX Income tax is tax chargeable on taxable income from trade and investment at the rate of 25% plus Aids levy of 3% of tax chargeable. The tax calculated is paid through Quarterly Payment Dates. QPDS 2017 25 March 10% 25 June 25% 25 Sept 30% 20 Dec 35% The taxpayer is required to complete ITF 12B: Return of the provisional tax due

Income Tax Cont’d. The final Income Tax Return (ITF 12C) is electronically or manually submitted All Clients are now on self assessment

P.A.Y.E P.A.Y.E is tax charged on taxable income from employment at the rates specified in tax tables. P2 Return This is a monthly return Every employer who pays or becomes liable to pay any amount by way of remuneration to any employee shall deduct that amount by way of employee’s tax any amount which shall be determined in accordance with the prescribed Pay As You Earn Tax Tables. The due date for remittance of PAYE is on or before the 10th of the following month and such remittance should be accompanied by a Form P2. 7/17/2018 ZIMRA Region one CCU

P.A.Y.E Cont…. ITF16 Return Every registered employer is required to submit returns of all persons employed by him detailing the salaries, wages, allowances, benefits and pension deductions for each person employed. The due date for submission of ITF16 is within 30 days after the end of the year of assessment and can be submitted electronically. (for example: the due date is 30 January 2017 for 2016 tax year) (Please note that ITF16 returns are different from P2 returns that are submitted monthly with PAYE payments) 7/17/2018 ZIMRA Region one CCU

VAT The threshold for registering for VAT is USD60 000 per 12 consecutive months Clients can be registered for VAT when they have met threshold or if they have shown that they can surpass the minimum threshold within the next 12 consecutive months.

VAT REGISTRATION REQUIREMENTS Must be registered with ZIMRA and have a Business Partner number (BP no). Completed REV 1 Form Current bank statement Proof that registration threshold has been met or will be met

VAT REGISTRATION REQUIREMENTS: Proof of threshold (cont’d.) Sales schedule from the time of commencement of trade to date. Invoices from the time of commencement of trade to date (with customers’ phone numbers) / confirmed or signed contracts. Invoices for supplied goods/services, bank statement, lease agreements etc VAT Categories are Category A Category B and Category C Category D Category D: A registered operator shall fall within Category D (on application) if— (a) the registered operator‘s trade consists solely of agricultural, pastoral or other farming activities and (b)….. (c) the total value of the taxable supplies of the registered operator from agricultural, pastoral or other farming activities is not more than $240,000

VAT DUE DATE Due date 25th of the following month after end of tax period

WITHHOLDING TAX Section 80 of the Income Tax Act Where a client is engaged in a contract aggregating USD 1000 or more and the client is not tax compliant there shall be withheld 10% of the aggregate of 1000 or more united states dollars. Therefore, where one does not have a valid tax clearance certificate deduct 10% To be remitted by the 10th of following month on Rev 5 form

ZIMRA TAXPAYER EDUCATION ZIMRA is there to serve: Help Desk: walk-in clients, calls, e-mails, letters Liaison Officers: allocated to particular portfolio of taxpayer Direct access to ZIMRA Management: where you are not happy with service provided, insist on seeing the next senior level (Supervisors, Managers, Regional Managers, Commissioner, Commissioner General)

For more information Website- www.zimra.co.zw Queries desk: 795710 ZIMRA CLIENT CARE:KURIMA HOUSE GROUND FLOOR Website- www.zimra.co.zw Queries desk: 795710

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