Presumptive Tax

Presumptive Tax legislation was introduced to broaden the revenue base in view of the increase in informal business activities. Selected sectors of the economy were targeted to ensure the participation of informal businesses in tax payment.

 

SELF-EMPLOYED PROFESSIONALS PRESUMPTIVE TAX

With effect from 1 January 2021 there was a new insertion on the sectors that pay presumptive tax. This insertion added professionals to the lists of categories subject to presumptive tax. The presumptive tax is paid by self-employed professionals who would not have submitted income tax returns for the previous year of assessment.

Self-employed professional is an individual who earns income, on his or her own account or as a member of a partnership, as:

a)    an architect registered or required to be registered under the Architects Act [Chapter 27:01]; 

b)    an engineer or technician registered or required to be registered under the Engineering Council [Chapter 27:22]; 

c)     a legal practitioner registered or required to be registered under the Legal Practitioners Act [Chapter 27:01]; 

d)    a health practitioner registered or required to be registered under the Health Professions Act [Chapter 27:19]; 

e)    real estate agents registered or required to be registered under the Estate Agents Act [Chapter 27:19];

and does not include any individual in possession of a tax clearance certificate to the effect that he or she has furnished a return under section 37 for the last year of assessment for which such a return is due;

 

RATES OF PRESUMPTIVE TAX FOR SELF-EMPLOYED PROFESSIONALS

Self-employed professional

Description

Presumptive Tax

(Monthly) RTGS

Architects

Registered or required to be registered under the Architects Act [Chapter 27:01],

250,000

Engineers or technicians

Registered or required to be registered under the Engineering Council [Chapter 27:22],

500,000

Legal Practitioners

Registered or required to be registered under the Legal Practitioners Act [Chapter 27:01],

500,000

Health practitioners

Registered or required to be registered under the Health Professions Act (Chapter 27:19)

500,000

Real estate agents

Real estate agents registered or required to be registered under the Estate Agents Act [Chapter 27:17]

1,000,000

 

DUE DATES FOR PRESUMPTIVE TAX

The full amount of presumptive tax is mainly due at the end of each quarter. However, operators can still remit on monthly basis. The respective due dates of the various categories are shown below:

Category

Due date

Informal traders

Within 30 days from the date the amount is recovered

Transport and driving school operators

By the 20th day after the end of the quarter

Hair Saloons

By the 20th day after the end of the quarter

Restaurants and bottle stores

By the 10th day after the end of the quarter

Cottage Industries

By the 10th day after the end of the quarter

Commercial Waterborne vessels

By the 10th day after the end of the quarter

Self-employed professionals

By the 30th day after the end of the quarter

Taxpayers on Presumptive Tax are encouraged to pay their taxes on a monthly basis such that by the end of the quarter they would have paid the full amounts of taxes.

RATES OF PRESUMPTIVE TAX

With effect from the year of assessment beginning 1 January 2021 Presumptive tax rates of the various categories are shown below:

Category

Description

Presumptive  Tax (Monthly)

Omnibuses

8 to 14 passengers

2,500

15 to 24 passengers

3,000

25 to 36 passengers

4,000

From 37 passengers and above

5,000

Taxi-Cabs

All

2,500

Driving Schools

Class 4 vehicles

30,000

Class 1 and 2 vehicles

40,000

Goods Vehicles

More than 10 tones but less than 20 tones

30,000

More than 20 tones

40,000

10 tones or less but with combination of truck and trailers of more than 15 but less than 20 tones

40,000

Hair Saloons

 

2500 per chair

Restaurants and bottle stores

 

10,000

Cottage Industries

 

10,000

Ship, cruiser, boat, houseboat, speedboat, canoe

Less than 5 passengers

10,000

Less than 16 passengers

15,000

Less than 26 passengers

20,000

Less than 50 passengers

25,000

50 or more passengers

30,000

Small scale miners

 

0% on the purchase price of precious metals or precious stones

Informal traders except Hair Saloons, Restaurants, bottle stores, Cottage Industries

Rental income

2,400

NB: Small Scale Miners are subject to presumptive tax at 0%. There is no tax that is charged but they are

required to submit their returns where they declare the values but the tax is zero.

 

PAYMENT OF PRESUMPTIVE TAX IN FOREIGN CURRENCY

Every person liable for presumptive tax has the option to pay the amount of the tax due in United States dollars at the applicable foreign currency auction rate prevailing on the date of payment.

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My Taxes, My Duties: Building my Zimbabwe!!

 

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 be attached to the Zimbabwe Revenue Authority.