The finance act is the first of its kind in over two decades and is intended to support the funding of the 2020 budget. Effectiveness of presumptive tax system in zimbabwe. New legislation to the sales tax act were also enacted in 1998 to allow for the introduction of sales tax on services, in 2002 to allow for the removal of sales tax. Income tax and vat acts online the income tax act, 1962, valueadded tax act, 1991 and other tax acts may be accessed on the sars website. Normal tax is payable by zimbabwean companies on their taxable income at the rate of 25%. Therefore all income that accrues or is deemed to have accrued in zimbabwe is taxed in zimbabwe. These 2019 budget statement proposals are still to be promulgated into law. The capital gains tax shall be calculated at a rate of 20% of the capital gain determined in accordance with the cgt act. Capital gains on specified assets are taxed in terms of the capital gains tax act 1981. The research looked at the implementation of the tax head, setting of tax rates, collection of revenue and the views of various stakeholders. Actual liability is assessed in terms of the capital gains tax act. Income deemed to be from a zambian source is generally subject to zambian income tax. If you are a contractor and want a calculation on your tax and net retention in zimbabwe.
The law in zimbabwe empowers the revenue authority to collect taxes on behalf of the government. During the period 19972008 and the post 2008 era the government of zimbabwe. Basics and definitions income tax act, 1961 background, concept and mechanism of income tax definitions, concept of income, previous year, assessment year, distinction between capital and revenue receipts and expenditure, residential status basis of charge and scope of total income 2. The corporate tax rate in zimbabwe stands at 25 percent. The income tax act under section 15 2 t allows for a deduction of expenditure incurred by a taxpayer within 18 months of beginning a business provided that. Zambia principally operates a sourcebased system for the taxation of income.
Postponement of tax on exportation of unbeneficiated platinum. The act was amended by the income tax amendment act 3 of 2011, which was promulgated by government notice 792011 gg 4732. Page 3 antiavoidance legislation provisions relating to persons carrying on business which extends beyond zimbabwe s 19 provisions relating to overunder pricing and to exports without sale of. Special circumstances in which income is deemed to. Section 18, 19 and 20 not to apply in certain cases 22. Clause 10 section 72 of the income thx act provides for the payment of provisional tax. Note by veritas this bill was gazetted on 25 january 2017. According to heritage foundation report 2012, tax in zimbabwe contributes 49. It has been indicated that zimbabwe is considering moving to a residencebased system during the current tax reform exercise. Zimbabwe revenue authority zimra is a statutory body established by the revenue authority act chapter 23. Zimbabwe amendments to the income tax act and introduction of new transfer pricing regulations february 2019 the new minister of finance issued a number of proposals to the income tax act chapter 23. There are certain deductions which are prohibited in terms of section 16 of the income tax act chapter 23. December 2018 and the version passed by the senate on 30th january 2019. Aids levy equal to 3% of the basic tax also payable.
Tax law and practice in zimbabwe, harare, zimbabwe. Zimbabwean resident individuals and corporates are subject to tax in zimbabwe on foreign interest and dividends. Part i preliminary 1 short title this act may he cited as the finance act, 20 4. This edition contains a consolidation of the following laws page income tax act 3 act. The zimbabwe revenue authority, or zimra, is the body responsible for collecting taxes and other revenue streams for the government in zimbabwe. Taxation tapera textbook table of contents chapter 1. The researchs main thrust was to evaluate the effectiveness of the presumptive tax system in zimbabwe, case study zimra region one. In general, the tax measures proposed in the budget for 2020 have an. Visit this page for an executive summary of zimbabwe s tax. Interest accruing from treasury bills the receipts and accruals of financial institutions in the form of income from treasury bills which were issued specifying that there are tax free are exempt from income tax. Jan 01, 2020 other changes to the income tax act include the following. Value added tax general amendment regulations, 2017.
Zimbabwe individual income tax is imposed at progressive rates up to 35%. Act to be income derived from a source within zimbabwe, at the specifiedpercentage of each united states dollar of that income. Like agriculture income completely exempt under sec 101 etc. There shall be charged, levied and collected throughout zimbabwe for the benefit of the consolidated reve nue fund an income tax in respect of the taxable income, as defined in this part, received by or accrued to or in favour of any person during the year of assessment ending the 31st march, 1968, and each succeeding year of as sessment thereafter. This page provides zimbabwe personal income tax rate actual values, historical data, forecast, chart, statistics, economic calendar and news. Rulings the commissioner general may issue an advance tax ruling on any provision in the income tax act, whether on his own initiative or upon application by a taxpayer or class of taxpayers on a transaction that is or may be liable to tax. Zimbabwe personal income tax rate 20042020 data 2021. This convention shall apply to taxes on income and capital gains imposed on behalf. All air prevention and control of pollution act, 1981 apprentices act, 1961 arbitration and conciliation act, 1996 banking cash transaction tax black money undisclosed foreign income and assets and imposition of tax act, 2015 central boards of revenue act, 1963 charitable and religious trusts act, 1920 charitable endowments act, 1890. Zimbabwe amendments to the income tax act and introduction. It is hereby notified that the minister of finance and economic development has, in terms of section 78 of the value added tax act chapter 23.
Zimbabwe will, in general, become liable to zimbabwe tax on zimbabwe sourced income. Christie, income tax in zimbabwe salisbury, chartered accountants of zimbabwe. Car benefit section 8 of the finance act confirms the new motoring benefit values as tabulated below. This means we work closely with icaz to ensure this study text contains the information.
Vat act to be amended to allow payment of outstanding. Personal income tax zimbabwe individual income tax is imposed at progressive rates up to 35%. Taxation is a subject that is feared by many students, but in actual fact, this is by far the simplest subject. Section 14 finance act 112017 carbon tax visitors to zimbabwe will pay carbon tax at 10% each month section 22 subsection e 112017 noczim debt. November, 20, sent the income tax act to his excellency the president of zimbabwe for his assent, he said. This research did not look at all informal sector operators but only focused on. In 1994 the sales tax act was further amended to allow for installments in tax payments and also in 1997 to provide for bad debts.
Pdf the nexus between section 15 2 t of the income tax. An act to provide for the taxation of incomes and matters connected therewith. The tax is payable by both public and private companies as well as private business corporations. An act to consolidate and amend the law relating to the imposition, assessment and collection of tax on incomes. The following tax rates and allowances are to be used when answering the questions. Find full list of all incomes who completely exempt from income tax. Interpretation in this act, unless the context otherwise requires.
Income derived or deemed to be derived from sources within zimbabwe is subject to tax. Withholding taxes % on dividends distributed by a zimbabwean resident company to resident shareholders other than companies and to nonresident shareholders. A 3% aids levy is imposed on the tax chargeable giving an effective tax rate of 25. Tax on property income in zimbabwe global property guide. Income tax is levied on earnings income of an individual or a business. The first 3 tax aspects are dealt with in the income tax act chapter 23. Zimbabwe amendments to the income tax act and introduction of. Tax credits are granted in respect of foreign taxes paid on foreign sources income in accordance with the income tax act and numerous double tax agreements. However, the residence of a personentity in zambia will widen the scope of taxation to include interest and dividend income from abroad. To make further provision for the revenues and public funds of zimbabwe and to provide for matters connected therewith or incidental thereto. The act allows under a scheme of reconstruction of a group of companies or a merger or other business or operation which in the. Short title this act may be cited as the income tax act. Recent tax policy and administration measures 62 references 63 boxes ii1. Section 121b income from services rendered in zimbabwe 3.
List of all incomes exempted from income tax, list of. Source is the place where income originates or is earned, not the place of payment. It derives its mandate from the revenue authority act, passed by the parliament of zimbabwe. Pdf a reflection on agricultural land tax in zimbabwe. Standard rate is 25% and in addition there is a 3% aids levy on the tax making the rate effectively 25. Income tax act and subsidiary legislation revised edition showing the law as at 1 january 2002 this is a revised edition of the law, prepared by the law revision commissioner under the authority of the revised edition of the laws act. Tax treaties details of tax treaties in force between the uk and zimbabwe, provided by hmrc. The finance act contains several longawaited changes to the tax framework which seek to address issues of low tax revenue growth, such as an increase in the vat rate to 7. The bill proposes a major shift from a sourcebased tax system to a residencebased. Prohibited deductions for income tax purposes the herald. Income tax in zimbabwe can range from 0 to 50 percent, and you need to be sure you are placed in the correct tax brackets. Options for creating fiscal space in zimbabwe 55 conclusion 61 appendix iv1. The current legislation requires registered businesses to withhold and remit to zimra, 10. We can provide current and historic tax rates, comparison tables and country surveys through our specialist tax databases.
Icaz presentation on tax avoidance and transfer pricing. The expenditure would have been allowed had it been incurred after beginning the. Tax rates individuals employment income year ended 31 december 2017. With effect from the year of assessment beginning on the 1st january, 2019, the schedule credits and rates of income tax to chapter i of the finance act. This book is accordingly written in such a way so as to make a student who is a user of this book to.
Prohibited expenses in the calculation of taxable income the following are some of. Zimbabwe pkf assurance, audit, tax, advisory and business. The tax rates and legislation in this reckoner are applicable from 1 january 2016 to 31 december 2016. Income sums received on cessation of employment 18. Satellite broadcasting services and electronic platform service provider deemed taxable income for foreign. Zimbabwe corporate tax rate 20062018 data 20192020. The african ejournals project has digitized full text of. The consolidated income tax act is available, in a pdf version, under the tax heading on the university of pretoria, laws of sa consolidated legislation website.
Zimbabwe national budget proposals 2019 including 2018 tax. Latest income tax slab rates, today we provide complete list of all incomes exempt from income tax. Basis individuals pay tax only on zimbabwe source earnings or. Tax avoidance and transfer pricing income tax act zvino mapetere caz 3. Deduction of tax for use of patent, design, trade mark etc 82.
May 04, 2020 list of all incomes exempted from income tax, list of exempted incomes 2020. Foreign dividends are subject to tax at a flat rate of 20%. Tax, in most countries, is the main source of government income. Its purpose, according to the long title was to amend the income tax act.
Income tax act 58 of 1962 south african government. Zimbabwe vat value added tax the standard rate of vat in zimbabwe. Special provisions in connection with income derived from sale of mining claims. The tax year in zimbabwe runs from 1 january to 31 december. Bonus section 1b of the finance act confirms that the tax free bonus has increased to zwl5 000 usd320. Special circumstances in which income is deemed to have accrued. We have also included a summary of key existing tax provisions. Zimbabwe has a national valueadded tax vat of 15% as of 2020, administered by the commissioner general, zimbabwe revenue authority zimra. Additionally, if the tax due and payable is still not paid after 60 days, a further 5% penalty will be imposed. Income tax amendment act, 2011 legal assistance centre. The personal income tax rate in zimbabwe stands at 24. The economic turmoil continued in zimbabwe till 2008 before the introduction of the multicurrency regime which have relatively stabilised the economy. What are the current income tax rates for residents and non residents in zimbabwe.
Taxed on income from a zimbabwean source or from a deemed zimbabwean source. Nonresidents are taxed on their income from zimbabwe sources. It is invaluable to students of zimbabwean tax law. The bill will also repeal the capital gains tax act chapter 23. The administration of income tax is governed by the income tax act of zimbabwe, chapter 23. The finance act 30 3 individuals employment income 37 4 pensions and benefit funds 59. The government of zimbabwe seeks to introduce land rentals to all land reform beneficiaries to raise revenue to compensate white former farmers and raise funds for periodic land audits among other. We have uptodate key fact summaries as well as detailed analyses of the tax. Partii income 1ax arnendments to chapter i of finance act chapter 23.
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