Background Some companies in Zimbabwe have reduced the rate of employing people on a permanent basis opting to employ on contract basis. This is because of the nature of some businesses, the certainty of going concern and at times the availability of constant income. This means that a person works for a certain period of time for example one week or a year and their contract is renewed after that or terminated. This also applies to non- governmental organisations that do projects with a speci ...
The Minister of Finance reinstates capital gains tax relief on sale of main home
Introduction In the current economic environment there are not so many people willing to part with their property despite the pressure coming from those holding RTGs or bond notes balances which they are looking to offload in case they fall prey to currency risk. It is so uncertain that sellers are only accepting to be paid in United States dollars or else there is no sale. This is notwithstanding the government’s position that the bond note is at par with the United States dollar. However in ...
Finance act no.3 of 2018 tackles phoenix behaviour
Introduction A phoenix is believed “to be a unique bird that lived for five or six centuries in the Arabian desert, after this time burning itself on a funeral pyre and rising from the ashes with renewed youth to live through another cycle”. Companies that are wound up and then resurrected through formation of a new company or companies that take over the business of such wound up company or companies by way of an analogy can be likened to phoenix birds. Thus upon realizing that the com ...
VAT registered taxpayers to brace up for new tax
Introduction Last week on Thursday, the 13th of December 2018, the government published a revised Finance (No.3) Act, 2018 (“the Bill”) which adds a few tax measures whilst refining some of the proposals of the first draft and the National Budget Speech published on the 22nd of November 2018. But what is fascinating is the revised definition of imported services which is not good news for VAT registered taxpayers. If you are a VAT registered taxpayer brace up of a ne ...
VAT refunds not paid on a silver platter
Introduction The general design of the VAT system is that businesses with certain prescribed taxable turnover or supplies are required to levy and collect VAT on such supplies and to reclaim input tax incurred on their purchases. Where the VAT collected from their customers exceeds input tax, the result is a VAT payable to the ZIMRA and VAT refund when input tax for a tax period exceeds output tax. VAT refund is sanctioned by s 44 of the VAT Act, Chapter 23:11. Getting the VAT refund is ...
Non resident suppliers of digital products to pay tax in Zimbabwe
Introduction The 2019 National Budget presented by the Minister of Finance and Economic Development Honourable Mthuli Ncube on the 22nd November 2018 contains a lot of pertinent issues that require unpacking. Firstly there are alternative views regarding application of intermediated money transfer tax on point of sale transactions (POS), whether the government is correct in demanding payment of tax in foreign currency in light of the law that provides that the bond notes and coins are at ...