Small-to-Medium Enterprises (SMEs) can benefit from many tax concessions, which are meant to facilitate their growth. Presenting the 2017 National Budget, the Minister of Finance and Economic Development highlighted the following tax concessions for the benefit of SMEs:

Income Tax

The Commissioner General of the Zimbabwe Revenue Authority (ZIMRA) may on application by a taxpayer who qualifies as an SME permit such taxpayer to pay Provisional Tax one month at a time in advance”. This will ease pressure that is associated with management of cash flows.

Moratorium on application of Section 23 of the VAT Act (Chapter 23:12):

For SMEs to be able to transact with private and public sector entities as corporate suppliers, they must be registered for Value Added Tax (VAT). This will enable the corporates to claim input tax on goods and services supplied by the SMEs. The following measures were put in place to facilitate the VAT registration for the SMEs who qualify or who meet the prescribed thresholds.

 

  • The penalties and prior tax liabilities are pardoned for qualifying taxpayers who are currently carrying on any trade
  • This applies to taxpayers who are not registered for VAT, and whose turnover is between $60000 and $240 000 per annum
  • The taxpayer should voluntarily apply for VAT registration before 30th June 2017

 

Benefits of registering under moratorium

 

  • There will be no back dating of VAT registration
  • No principal, penalties and interest will be charged for the period prior to registration
  • Tax clearance certificate will be availed to the client upon completion of the registration process
  • Ability to trade with other VAT registered taxpayers without 10% being withheld
  • There is an opportunity to formalise without tax costs

 

Failure to register for VAT under the moratorium will result in the following measures:

  • The registration for VAT will be backdated
  • Penalties and interest will be charged
  • Presumptive Tax

Informal traders will be charged Presumptive Tax at the rate of ten per centum of each dollar of the rent they pay

Small-scale miners, shall be charged Presumptive Tax at the rate of five per centum of each dollar of the purchase price of precious metals or precious stones upon which the tax is chargeable.

Reminder. Payment of Pay As You Earn (PAYE) for the month of May 2017 is due on or before 10th June 2017.

Disclaimer

This article was compiled by the Zimbabwe Revenue Authority for information purposes only. ZIMRA shall not accept responsibility for loss or damage arising from use of material in this article and no liability will attach to the Zimbabwe Revenue Authority.

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