Zimbabwe Revenue Authority

Prohibited Deductions –Section 16 of the Income Tax Chapter 23:06

Expenses or losses incurred in the production of income or for the purposes of trade shall be allowed as deductions against income if they are not of a capital nature nor prohibited according to Section 16 of the Income Tax Chapter 23:06.

SECTION	EXPLANATION
Sect 16 (1) (a)	The cost incurred by any taxpayer in personal maintenance, his family or establishment.
Sect 16 (1) (b)	Domestic or private expenses of the taxpayer, including expenses incurred in travelling between his home and the place at which he carries on a trade and, in the case of a taxpayer who carries on two or more trades which are distinct in nature, between the places at which such trades are carried on.
Sect 16 (1) (c)	Any loss or expense which is recoverable under any insurance contract or indemnity.
Sect 16 (1) (d)	Tax upon the income of the taxpayer or interest payable there- on, whether charged in terms of this Act or any law of any country whatsoever. The tax categories that a registered operator may be liable to remit include but are not limited to: Income Tax Pay As You Earn Value Added Tax Capital Gains Tax Carbon Tax Presumptive tax. Non-resident shareholders’ tax. Resident shareholders’ tax. Non-residents’ tax on fees. Non-residents’ tax on remittances. Non-residents’ tax on royalties.
Sect 16 (d) (1)	Any amount of Intermediated Money Transfer Tax charged in terms of section 22G of the Income Tax Act.
Sect 16 (1) (h)	Interest which might have been earned on any capital employed in trade.
Sect 16 (1) (i)	The rent of, or cost of repairs to, or expenses incurred on, any premises not occupied for trade, or of any dwelling or domestic premises except in respect of such part as may be occupied for the purposes of trade.
Sect 16 (1) (j)	The cost of securing sole selling rights.
Sect 16 (1) (k)	Passenger Motor Vehicle leasing cost excess: Amounts, in excess of $100,000 paid for leasing a “passenger motor vehicle” (as defined in the Fourth Schedule of the Income Tax Act (Chapter 23:06)) where the lease was entered into on or after 1st January 1999.
Sect 16 (1) (l)	The cost of any shares awarded by the company to an employee or director. This prohibition would counter any claim for a deduction by a company in respect of either an issue of its own share or, an award of shares in another company (for related companies).
Sect 16 (1) (m)	Expenditure incurred on entertainment, whether directly or by the provision of an allowance to any employee, including a director. “Entertainment” is defined as including “hospitality” in any form” A deduction is therefore clearly precluded in respect of the cost of, for example, a lunch for business associates, despite the host’s purpose being the furtherance of trade relationships
Sect 16 1(n)	Expenditure incurred in the production of any income arising from stocks or shares of any company. Dividends from foreign companies, which are liable to income tax in the hands of a taxpayer ordinarily resident in Zimbabwe, are taxable (at a flat rate; without any deduction for related expenditure.)
Sect 16 1 (o)	Expenditure incurred in the production of interest on any loan or deposit with local financial institution
Section 16 (1) r	The prohibited deduction applies to the general administration and management fees paid by a subsidiary or holding company or a local branch (where the parent is a foreign company engaging in local mining operations).
Section 16(s) interest	Any interest expenditure incurred on foreign loans in excess of the interest that would have been payable had the exchange rate used to purchase the foreign currency needed to service the interest on the loan been the same exchange rate as that ordinarily offered to other clients of the financial institution providing or mediating the loan on the date of the transaction in question.”

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 attach to the Zimbabwe Revenue Authority.

Youth Employment Tax Incentive

Youth Employment Tax Incentive

Section 13A of the Finance Act (Chapter 23:04) provides for a Youth Employment Incentive (YEIT) to qualifying taxpayer who employs youths in their companies who are below the age of 30 years with effect from 01 January 2020.

The credit for each additional employee hired is $1,500.00 per month up to a maximum amount of $180,000.00 per annum.

The credit is applicable upon satisfying the conditions below:

a) The qualifying taxpayer must be a registered taxpayer and have a tax clearance certificate for the preceding year of assessment; and

b) The credit can only be claimed after the additional employee has served for twelve consecutive months of employment and should be earning at least two thousand dollars’ Zimbabwean dollars per month; and

c) The credit may not be claimed by companies engaged in trade or investment having an annual turnover exceeding one million United Sates dollars; and

d) If the credit exceeds the tax payable in a year of assessment, no refund shall be claimed.

e) The credit shall be added to the assessed loss and the amount is carried forward to the next year of assessment.

For the purposes of this credit employee excludes a trainee, intern, apprentice and a managerial employee. Managerial employee includes supervisors as well. The credit for employee employed on any other date after 1 January shall be claimable in the following year of assessment.

COVID 19 is real. Always remember to sanitise, wash your hands with water and soap. Stay safe.

My Taxes, My Duties: Building my Zimbabwe!!

Disclaimer

To contact ZIMRA:

Visit our website : www. zimra.co.zw

Like us on Facebook : www.facebook.com/ZIMRA.ZW

Send us an e-mail : This email address is being protected from spambots. You need JavaScript enabled to view it./webmaster@zimra.co.zw

Call us (Head Office) : 0242 –758891/5; 790813; 790814; 781345; 751624; 752731

e-TIP : http://ecustoms.zimra.co.zw/etip

Online Application Of A Visitor’s TIP On Private Motor Vehicles

ONLINE APPLICATION OF A VISITOR’S TIP ON PRIVATE MOTOR VEHICLES

The Zimbabwe Revenue Authority (ZIMRA) has an electronic platform for Temporary Import Permits (TIP's) applications which you can access from anywhere in the world prior to arriving at the Port of Entry.

Steps to follow in registering the e-tip

1. The e-tip can be accessed from the mobile app downloaded from Appstore or Google Playstore.

2. Alternatively, the e-TIP can be accessed from the e-tip webpage accessible on https://ecustoms.zimra.co.zw/etip/

3. From the downloaded mobile app or webpage, select sign up if you do not have an e-tip account. The required sign up details include Last name, First name, Passport number, email address, mobile number and a password of your choice. The password must contain at least one digit/special character/lowercase/uppercase letter and be at least ten characters long. Confirm the details and proceed to the next stage

4. A dialogue box will appear confirming that a message has been sent to the provided email address.

5. Open email and activate your account using the activation code sent to the email.

6. After activation, go back to the mobile app or webpage and enter your passport number and password on the sign in page.

7. After logging in, select New TIP application and fill in the required information. If pulling a trailer. Trailer details must also be completed.

8. Click the submit button when all required details have been entered.

9. After submission of details, check your email for an e-tip reference number. This is the number you will submit to the ZIMRA officials at the port of entry when you travel to Zimbabwe.

The process above, can save travellers valuable time and improve turnaround time at the port of entry. This electronic process also brings convenience during this COVID-19 era.

COVID 19 is real. Always remember to sanitise, wash your hands with water and soap. Stay safe.

My Taxes, My Duties: Building my Zimbabwe!!

Disclaimer

To contact ZIMRA:

Visit our website : www. zimra.co.zw

Like us on Facebook : www.facebook.com/ZIMRA.ZW

Send us an e-mail : This email address is being protected from spambots. You need JavaScript enabled to view it./webmaster@zimra.co.zw

Call us (Head Office) : 0242 –758891/5; 790813; 790814; 781345; 751624; 752731

e-TIP : http://ecustoms.zimra.co.zw/etip

Green Route And Red Route At Ports Of Entry

The World Customs Organisation (WCO) system allows for international passengers or travelers to choose between two types of channels for clearance on arrival at ports of entry. Under this system, travelers are segmented according to the nature of declarations or importations. The Red and Green Route system is designed to simplify and speed up the clearance of travelers by Customs officials.

In terms of Section 17(2) of the Customs and Excise (General) Regulations SI 154 of 2001,

the Commissioner may appoint different routes to be used by disembarking travelers and at ports of entry where such routes have been appointed, a traveller may elect to use whichever route is applicable to them

Green Route

The Green Route is for passengers having with them no goods or only goods which can be admitted free of import duties and taxes and which are not subject to import prohibitions or restrictions. Generally, these are goods that qualify under Traveller’s or Tourist rebate.

Red Route

If the goods being carried by a traveller do not qualify under the rebates stated above, then the traveller should use the Red Route. This route is used by travellers who are carrying dutiable or restricted goods.

Red Route Procedure

At the red route, the traveller completes the declaration form (Form Number 47) declaring goods being imported. The Zimbabwe Revenue Authority (ZIMRA) officer will assess the duty payable. A traveller not sure of which route to follow should always use the Red Route.

NB: In terms of section 16 of the Customs and Excise (General) Regulations SI 154 of 2001, selection of a Green Route by a passenger will be deemed to be a declaration to the effect that he is not carrying any dutiable or restricted goods.

COVID 19 is real. Always remember to sanitise, wash your hands with water and soap. Stay safe.

My Taxes, My Duties: Building my Zimbabwe!!

Disclaimer

To contact ZIMRA:

Visit our website : www. zimra.co.zw

Like us on Facebook : www.facebook.com/ZIMRA.ZW

Send us an e-mail : This email address is being protected from spambots. You need JavaScript enabled to view it./webmaster@zimra.co.zw

Call us (Head Office) : 0242 –758891/5; 790813; 790814; 781345; 751624; 752731

e-TIP : http://ecustoms.zimra.co.zw/etip

Offences And Penalties In Fiscalisation

What is Fiscalisation?

It is the use of fiscal devices to record taxable transactions and other tax information on the read-only fiscal memory at the time of sale. It was first introduced through Statutory 104 of 2010.

Who should Fiscalise?

All Value Added Tax (VAT) registered operators are required to Fiscalise as outlined in SI 104 of 2010 as read with SI 148 of 2016 and SI 153 of 2016

What are offences and penalties in Fiscalisation?

The offences and penalties are as follows:

Any person who fails to Fiscalise in terms of section 3 shall be liable for a civil penalty of US$25.00 per point of sale, for each day the taxpayer remains in default, not exceeding a period of one hundred and eighty-one days and if the person continues to be in default after 181 days shall be guilty of an offence and liable on conviction to a fine not exceeding level seven or to imprisonment for a period not exceeding 12 months or to both such fine and such imprisonment.
Any person who manufactures, sells or distributes fiscalised electronic registers or fiscal memory devices or any other register or device purporting to be such without obtaining the approval, shall be guilty of an offence and liable on conviction to a fine not exceeding level seven or to imprisonment for a period not exceeding 12 months or to both such fine and such imprisonment
Any person who fails to comply with any requirements of Second Schedule applicable to him or shall- if the Commissioner finds that there was an intent on the person’s part to evade the payment of any tax payable by him or her, be chargeable with additional tax in terms of section 66 of the Act and shall be guilty of an offence and liable on conviction to a fine not exceeding level seven or to imprisonment for a period not exceeding 12 months or to both such fine and such imprisonment
Failure to deliver device by approved supplier within 6 weeks from date of order and full payment- the approved supplier shall be guilty of an offence and liable on conviction to a fine not exceeding level seven or to imprisonment for a period not exceeding 12 months or to both such fine and such imprisonment
Non-Usage of fiscal device by registered VAT operator- the register VAT operator shall be guilty of an offence and liable on conviction to a fine not exceeding level seven or to imprisonment for a period not exceeding 12 months or to both such fine and such imprisonment and additional assessment in terms of section 66 of VAT Act
Failure to interface devices by clients- the clients shall be guilty of an offence and liable to a civil penalty of $25 per day up to a maximum period of 181 days as per statutory instrument 153 of 2016 and liable on conviction on to a fine not exceeding level seven or to imprisonment for a period not exceeding 12 months or to both such fine and such imprisonment

COVID 19 is real. Always remember to sanitise, wash your hands with water and soap. Stay safe.

My Taxes, My Duties: Building my Zimbabwe!!

Disclaimer

To contact ZIMRA:

Visit our website: www. zimra.co.zw

Like us on Facebook: www.facebook.com/ZIMRA.ZW

Send us an e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it./webmaster@zimra.co.zw

Call us (Head Office): 0242 –758891/5; 790813; 790814; 781345; 751624; 752731

e-TIP: http://ecustoms.zimra.co.zw/etip

Obligations of a Registered Operator

Every registered operator is required to fiscalise in accordance with the provisions of Statutory Instrument 148 of 2016?.

What are the obligations of a registered operator who is required to fiscalise?

1. To acquire fiscal device(s) from any of the approved suppliers.

2. The devices bought are registered by the supplier.

3. The next step is the configuration of the devices to record both the local and foreign currency transactions. This can be done by either purchasing a multi-currency device or purchasing separate devices that are then configured to record different transactions.

4. The process is then completed when the devices are then linked to the ZIMRA server. This is also known as INTERFACING the devices.

What are the consequences of failing to fiscalise?

a) Any registered operator who does not use a fiscal device to record his transactions will be subjected to a civil penalty of ZW$25 per point of sale for each day the taxpayer remains in default up to a maximum of 181 days beyond which the person will be guilty of an offence and liable to conviction to a fine not exceeding level seven or to imprisonment for a period not exceeding 12 months or to both such fine and such imprisonment.

b) Any person whose device is not interfaced shall be guilty of an offence and liable to a fine of ZW$25 per day up to a maximum of 181 days.

c) No tax clearance certificates will be issued to those registered operators that are not fully fiscalised and interfaced.

COVID 19 is real. Always remember to sanitise, wash your hands with water and soap. Stay safe.

My Taxes, My Duties: Building my Zimbabwe!!

Disclaimer

To contact ZIMRA:

WhatsApp line : +263 782 729 862

Visit our website : www. zimra.co.zw

Like us on Facebook : www.facebook.com/ZIMRA.ZW

Send us an e-mail : This email address is being protected from spambots. You need JavaScript enabled to view it./webmaster@zimra.co.zw

Call us (Head Office) : 0242 –758891/5; 790813; 790814; 781345; 751624; 752731

e-TIP : http://ecustoms.zimra.co.zw/etip

Authorised Economic Operator (AEO) Programme

Customs – Business Relationship

In line with international best practice and the Customs and Excise Act [Chapter 23:02] section 216B, Zimbabwe has implemented the Authorised Economic Operator (AEO) programme.

1. Authorised Economic Operator (AEO)

· AEO is a programme under the World Customs Organisation (WCO) SAFE Framework of Standards to secure and enhance international supply chain security and facilitate movement of legitimate goods across international borders.

· An AEO may defined as a party involved in the international movement of goods in whatever function that has been approved by or on behalf of a national Customs Administration as complying with WCO or equivalent supply chain security standards. AEO include inter-alia manufacturers, importers, exporters, brokers, carriers, consolidators, intermediaries, ports, airports, terminal operators, integrated operators, warehouses, distributors. The facility is open to all stakeholders in this supply chain.

2. ZIMRA AEO Programme

· Administered by Customs and Excise Division, the AEO Programme is a voluntary programme open to all business entities that participate in the global supply chain.

· Business entities that meet pre-determined compliance standards are accredited as AEOs and as such enjoy appropriate facilitation on Customs clearance.

3. Benefits of AEO Programme

· Faster movement of cargo through the Border/Port of entry

· Simplified Customs formalities

· Fewer physical and document-based controls

· Reduced demurrage and other related costs

· Priority treatment in query resolution

· Choice of the place for physical examination

· Facilitation for movement of cargo during periods of trade disruptions

· Improved relations with ZIMRA

· Promotes an AEO accredited entity as a secure and reliable trade partner thereby improving business competitiveness.

· Mutual recognition of AEO authorizations between Customs authorities as a long term benefit.

· Provides businesses with internationally recognized security standards.

· The opportunity to self-assess allows entity to have a full insight into its operations and business practices, identify and strengthen any security or compliance related weaknesses

4. Qualification Criteria

Any entity interested in getting benefits of the AEO programme shall apply in writing to the Commissioner of Customs & Excise for accreditation. The entity must meet the following conditions:

· Be established in Zimbabwe;

· Have appropriate record of compliance with Customs and other relevant laws;

· Have a satisfactory system of managing commercial and, where appropriate, transport records;

· Have proven financial solvency; and

· Ensure that there is general maintenance of approved security and safety standards at both the entity`s place of operations as well as its business systems and procedures.

5. AEO Application Process

· Consultation with nearest ZIMRA office on AEO application procedure

· Completion of and submission of self-assessment questionnaire, application form and other relevant attachments required for the granting of AEO status

· Examination of application by ZIMRA

· Onsite inspection by ZIMRA

· AEO authorization

6. Obligations of an AEO

The AEO is required to;

· Keep proper records it terms of Section 223 of the Customs & Excise Act [Chapter 23:02].

· Maintain an accounting system which is in accordance with the Generally Accepted Accounting Practices (GAAP) and which facilitates audit based customs control.

· Ensure that its staff members conduct business in accordance with the procedures of the Customs & Excise Act and any other Act administered by ZIMRA or any instructions given by the Commissioner of Customs & Excise.

· Ensure a relationship of good faith is maintained by its staff at all times in dealing with the ZIMRA.

· Allow ZIMRA officers physical and electronic access to the information and documents as provided for in terms of Section 223 of the Customs & Excise Act.

· Use compatible E-Systems for Customs procedures and commit to regularly upgrade the systems.

· Ensure that its premises are in conformity with the appropriate security and safety standards.

COVID 19 is real. Always remember to sanitise, wash your hands with water and soap. Stay safe.

My Taxes, My Duties: Building my Zimbabwe!!

Disclaimer

To contact ZIMRA:

WhatsApp line : +263 782 729 862

Visit our website : www. zimra.co.zw

Like us on Facebook : www.facebook.com/ZIMRA.ZW

Send us an e-mail : This email address is being protected from spambots. You need JavaScript enabled to view it./webmaster@zimra.co.zw

Call us (Head Office) : 0242 –758891/5; 790813; 790814; 781345; 751624; 752731

e-TIP : http://ecustoms.zimra.co.zw/etip

Importation Of Spirits Under Rebate

Importation Of Spirits Under Rebate

The Customs and Excise (Spirit Rebate) Regulations of 1982 provides that a rebate of Customs duties may be granted on spirits and methylated spirits specified in the Second schedule of the same regulations to an extend that is sufficient to reduce the duties to an effective rate set out in the regulations. The general conditions for the importation of the Spirits under rebate are that:

1. The spirits or methylated spirits are obtained by an authorised user.

2. The containers of any methylated spirits are clearly labelled and marked in such a manner as to indicate the type of methylated spirits contained therein.

Definition of an Authorised user

According to Section 6 of the Spirit Rebate Regulations of 1982 an authorised user is a person who has been authorised by the Commissioner in writing to use: -

a. Spirits other than methylated spirits

b. Industrial methylated spirits

c. Industrial Methylated Spirit R grade.

d. Industrial methylated spirits (1st quality) under rebate only for the purposes which the rebate of duty is granted by the regulations.

The person who intends to be registered as an authorised user of Rebated Spirits shall make an application to the Commissioner on Form EX 47 for authority to use such spirits

The reduced rates in respect to importation of Rebated spirits are set out in the Second schedule (section 4) for Rebate on Customs duties and the Third Schedule for Rebate of Excise duties.

Disclaimer

COVID 19 is real. Always remember to sanitise, wash your hands with water and soap. Stay safe.

My Taxes, My Duties: Building my Zimbabwe!!

Disclaimer

To contact ZIMRA:

WhatsApp line: +263 782 729 862

Visit our website: www. zimra.co.zw

Like us on Facebook: www.facebook.com/ZIMRA.ZW

Send us an e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it./webmaster@zimra.co.zw

Call us (Head Office): 0242 –758891/5; 790813; 790814; 781345; 751624; 752731

e-TIP: http://ecustoms.zimra.co.zw/etip

Offences And Standard Scale Of Fines

The Customs and Excise Act Chapter 23.02 and the Customs and Excise (General) Regulations Statutory Instrument 154 of 2001 provides for penal provisions for various offences committed on import and export of goods. In order to avoid being penalised, it is encouraged that traders comply with rules and regulations relating to Customs matters. Constant and regular familiarisation with the provisions of the Customs and Excise Act Part X111 on offences, penal provisions and procedure can also reduce the risk of being fined.

The standard scale of fines was revised, promulgated and gazetted through Statutory Instrument (S.I.) 14A of 2023 on 22 February 2023, Statutory Instrument 209 of 2021 of 30 July 2021 was therefore repealed. The new standard scale of fines as per S.I. 14A of 2023 is as shown in the table below expressed in United States dollars but payable in the equivalent Zimbabwean dollars at the prevailing interbank rate.

STANDARD SCALE OF FINES

Level	Monetary amount US$
1	5
2	15
3	30
4	100
5	200
6	300
7	400
8	500
9	600
10	700
11	1 000
12	2 000
13	3 000
14	5 000

The table below shows some of the most common offences which are frequently committed by clients deliberately or unknowingly evading duties and taxes and the corresponding fine levels and amounts of fine as pegged in the recent S.I. 14A of 2023 (Standard scale of fines)

CUSTOMS AND EXCISE ACT SECTION AND OFFENCE	LEVEL OF FINE	AMOUNT US$

173. False statements by persons arriving in or departing from Zimbabwe	7	400

174. False invoices, false representation and forgery	12	2,000

181. Bribery and collusion	14	5,000

182. Smuggling	12	2,000
183. Importation of restricted goods	12	2,000
184. Miscellaneous offences	12	2,000

185. Warehousing irregularities	7	400

186. Penalties for failure to keep books, etc., in connection with manufacture of goods liable to excise duty or surtax	12	2,000

188. Ships, vehicle, aircraft used for the conveyance of goods liable to forfeiture.	14	5,000

All clients are therefore, encouraged to pay their duties on time and in full to avoid fines.

My Taxes, My Duties: Building my Zimbabwe!!

Disclaimer

This article was compiled by the Zimbabwe Revenue Authority (ZIMRA) 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:

WhatsApp line: +263 782 729 862

Visit our website: www. zimra.co.zw

Like us on Facebook: www.facebook.com/ZIMRA.ZW

Send us an e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it./webmaster@zimra.co.zw

Call us (Head Office): 0242 –758891/5; 790813; 790814; 781345; 751624; 752731

e-TIP: http://ecustoms.zimra.co.zw/etip

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Zimbabwe Revenue Authority

News

Prohibited Deductions –Section 16 of the Income Tax Chapter 23:06

Youth Employment Tax Incentive

Online Application Of A Visitor’s TIP On Private Motor Vehicles

Green Route And Red Route At Ports Of Entry

Offences And Penalties In Fiscalisation

Obligations of a Registered Operator

Authorised Economic Operator (AEO) Programme

Importation Of Spirits Under Rebate

Offences And Standard Scale Of Fines

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