BENEFITS OF TAX COMPLIANCE

Did you know that you can avoid unnecessary penalties by following basic tax compliance requirements? Some clients have been penalised for failing to adhere to statutory requirements. This has been as a result of ignorance of the benefits derived from compliance and the costs associated with non-compliance. Most of these costs can be avoided because they negatively impact on the cash flows of businesses and the taxpayer’s reputation.

 

The statutes provide for the charging of additional tax and penalties equal to the defaulted amount and interest, where a client fails to adhere to its provisions. In some instances, fines, prosecution and imprisonment may be effected depending on the nature of the default. Regular audits are usually conducted by ZIMRA to check on compliance and to correct problem areas identified, as well as educate the clients were necessary.

 

Costs associated with non-compliance come in various forms such as:

  • Time wasting
  • Court cases that may affect the image of the business.
  • High collections costs, as well as possible legal fees
  • Extra costs in additional tax and penalties that may negatively affect cash flows.

 

To avoid such costs, clients should:

  • Keep proper records
  • Adhere to due dates for payment of taxes or submission of returns
  • Pay the correct amount of tax
  • Declare the correct amount of taxable income in their tax returns.

The Benefits of Tax Compliance

 

Benefits of tax compliance are mainly derived from proper record keeping. These benefits are but not limited to:

 

  • The information kept by businesses is used to effectively manage the businesses as well as check and show company performance.
  • Business efficiency is also derived from good record keeping.
  • When business systems are up to date and properly managed, there is improved decision making.
  • Updated records enable a clear assessment of the current affairs of the company.
  • Proper records facilitate audits and reduce the time taken by auditors.

 

Records can be maintain in either manual or automated form. The law requires that all records be kept in the English language. It should be noted that there is a significant advantage in automated record keeping over manual records, although manual records provide an effective back up in the event of system failure.

 

The table below shows some of the important due dates which our valued clients should keep in mind.

Tax Head

Due Date

(on or before)

Value Added Tax (VAT)

25th of the following month

Pay As You Earn (PAYE)

10th of the following month

Presumptive Tax

10th of the following month after the  end of every Quarter

Corporate Tax Quarter Payment Dates (QPDs)

Due Date

(on or before)

Instalment Due

(% of the annual tax payable)

1st QPD

25th March, 2015

10%

2nd QPD

25th June, 2015

25%

3rd QPD

25th September, 2015

30%

4th QPD

20th December, 2015

35%

Our valued clients are reminded that Employees Tax (PAYE) for the month of March 2015 is due on the 10th of April 2015.

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.

 

To contact ZIMRA:

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