What is input tax?

Section 2 of the Value Added Tax Act [Chapter 23:12] defines input tax as the tax incurred by the registered operator on the supply of any goods or services, on the importation of goods or an amount equal to the tax fraction, at the time the supply is made or deemed to have taken place, based on the lesser of any consideration in money given by the registered operator for or the open market value of the supply. Input tax may be deducted by the recipient where such goods or services are acquired by the recipient who is a registered operator for the purposes of making taxable supplies.

Which amounts may be claimed as input tax?

  • Any VAT paid on local purchases may be claimed as input tax where the supplier has charged tax on the supply and has provided the recipient with a tax invoice as required.
  • Where the importer (being a registered operator) has paid VAT on the importation of goods and is in possession of a bill of entry as required.
  • If goods or services are acquired for the purpose of making both taxable and non-taxable supplies, only the VAT attributable to taxable supplies can be claimed as input tax.
  • Where goods or services are acquired by a registered operator to make both taxable and exempt supplies, full VAT paid may be claimed as input tax if the value of taxable supplies to total supplies exceeds 90%.

Which amounts may not be claimed as input tax?

VAT paid in respect of the following purchases may not be claimed as tax;

§  Entertainment: The term “entertainment” means the provision of any food, beverages, accommodation, entertainment, amusement, recreation or hospitality of any kind by a Registered Operator whether directly or indirectly to anyone in connection with trade carried on by that person. As a general rule expenses relating to entertainment may not be deducted as input tax. There are, however, some exceptions to the rule. Examples of entertainment include the following:

ü Staff refreshments such as tea, coffee and other beverages and snacks and other ingredients purchased in order to provide meals to staff, clients and business associates

ü Catering services acquired for staff canteens and dining rooms including own equipment, furniture and utensils used in kitchens, canteens and staff dining rooms

ü Christmas lunches and parties, including the hire of venues

ü Beverages, meals and other hospitality and entertainment supplied to customers and clients at product launches and other promotional events

ü Entertainment of customers and clients in restaurants, theatres and night clubs

ü Capital goods such as holiday houses, yachts and private aircraft used for entertainment.

§ Acquisition of passenger motor vehicle.

§ Goods or services acquired exclusively for making exempt supplies.

§ Club membership fees-any fees/subscriptions paid by a registered operator for membership of a club or association of a sporting social or recreational nature.


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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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