Zimbabwe Revenue Authority

Authorized 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 Authorized Economic Operator (AEO) programme.

Authorized Economic Operator (AEO)

AEO is a programme under the World Customs Organization (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.

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.

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

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.

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

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.

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.

Exportation of goods under Regional Trade Agreements (RTA) & Free Trade Area (FTA)

Zimbabwean exporters may be registered under various trade protocols in order to enjoy preferential rates of duty when their products enter another Member State. Goods exported under a Regional Trade Agreement (RTA) or Free Trade Area (FTA) may be accorded preferential treatment on entry into another country. Preferential treatment means, products will enjoy lower or total waiver of duties, while non-member states pay higher customs duties. The rates that are paid by World Trade Organisation (WTO) members outside a FTA are in terms of the Most Favoured Nation (MFN) clause of WTO. Zimbabwean companies may derive benefits from trading under the RTA or FTA.

Zimbabwe is party to the following Trade Agreements:

COMESA Trade Protocol
SADC Trade Protocol
Zimbabwe/Malawi Trade Agreement.
Zimbabwe/Botswana Trade Agreement
Zimbabwe/Namibia Trade Agreement
Zimbabwe/ Mozambique Trade Agreement
EU-ESA Interim-Economic Partnership Agreement
UK-ESA-EPA Economic Partnership Agreement

Registration for Exporters under RTA

Exporters intending to export under these trade agreements should apply to the Commissioner Customs & Excise through their nearest Zimbabwe Revenue Authority (ZIMRA) offices.

Who is eligible for registration?

Zimbabwean registered companies involved in manufacturing of goods.
Zimbabwean registered companies involved in merchandising, distribution and commodity broking.

Goods that qualify for preference

The following goods may qualify for preferential treatment:

Wholly grown products e.g. agricultural products
Animals originating in Zimbabwe
Mineral products and
Products of the manufacturing sector meeting products product specific rules of origin (Please note list is not exhaustive)

Exporter Registration Requirements

A formal application letter (on company letter head/logo) by the company to be registered under the agreement.
A certified copy of certificate of incorporation.
Certified copy of CR14
Certified copy of CR6
A valid tax clearance certificate (ITF263).
List of contact persons including their contact numbers and physical addresses.
A list of products intended to be exported (tariff headings mandatory).
List of raw materials used and where they are sourced from (tariff headings mandatory).
A detailed step by step description of the manufacturing process for each product.
A sketch plan of your factory showing machinery layout.
A certified copy of title deeds or lease agreements for the premises together with any copies of utility bills incurred in the last 3 months.
A factual cost analysis of the products to be exported.

Commodity Brokers, Merchants and Distributors

A formal application letter by the company to be registered under the agreement.
A certified copy of the certificate of incorporation.
A valid tax clearance certificate (ITF263).
List of contact persons.
A list of products intended for export.
A letter from the manufacturer of products authorizing the distributor/merchant/broker to export their product(s).
Manufacturer’s registration letter to export the particular products for which they are seeking registration.

Proof of Origin needed in the importing country

A Certificate of Origin certified by ZIMRA-Customs & Excise will be submitted to the Customs of importing country on importation of Zimbabwe originating goods.

For exports to the EU, a Zimbabwean company will not need to have certification as registration with ZIMRA under the Registered Exporter System (REX) will suffice.

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.

Capital Gains Tax on cession agreements

Tax credits for corporates

A tax credit is a type of tax incentive that reduces the tax liability of qualifying taxpayers as it is deducted from the income tax that would have been charged to the taxpayer. There are two tax credits which can be claimed by corporates namely the Youth Employment Credit for a qualifying taxpayer who employs an additional employee aged thirty (30) years or less during the year of assessment and the tax Credit for employment of physically disabled persons for a qualifying taxpayer who employs a physically disabled person. For the purposes of these credits:

“Employee” excludes a trainee, intern, apprentice and a managerial employee. Managerial employee includes a supervisor.

“Qualifying taxpayer” means a company or trust or individual taxpayer engaged in trade or investment who qualifies for a credit in terms of Section 13A of the Finance Act [Chapter 23:04].

Tax credit for employment of the youth (Youth Employment Tax Incentive).

Finance Act No.3 of 2019 introduced the Youth Employment Tax Incentive (YETI). This incentive is aimed at stimulating employment of young people in Zimbabwe. The credit to be deducted from the income tax payable by a qualifying taxpayer is ZWL$1500 per month for each additional employee. However, the aggregate amount to be granted as a credit for all additional employees shall not exceed ZWL$180,000.00 per year.

What are the conditions to be fulfilled for the Youth Employment Credit?

The qualifying taxpayer claiming the credit should be a registered taxpayer and should be compliant for the preceding year of assessment. All returns and taxes due should have been paid and if on payment plan client must be adhering to the same.
The tax credit will only be claimed after the additional employee has served for a consecutive 12 months and should be earning at least ZWL$2,000.00per month. The tax credit will not apply to companies or trusts or individual taxpayers whose annual turnover is equal to or exceeds an equivalent of US$1 million.

Please note that where the taxpayer has an assessed loss during the year of assessment, the credit shall be added to the assessed loss and the amount is carried forward to the next year of assessment. With effect from the 1^st of January 2022, any excess credit incurred by a company with a payable position will be carried forward. The Commissioner shall not refund any excess credit if the credit exceeds the tax payable during the year of assessment.

TAX CREDIT FOR EMPLOYMENT OF PHYSICALLY DISABLED PERSONS

The tax credit for employment of physically disabled persons was introduced with effect from the 1^st of January 2022, to encourage employers to employ such physically challenged persons. A “Physically challenged person” means an individual having a medically ascertainable physical condition or impairment that makes it difficult for him or her to do things that other individuals without the same physical condition or impairment can easily do. A tax credit of US$50 (or ZWL equivalent at prevailing rate) shall be granted per month for each additional physically challenged employee up to a maximum of US$2,250 (or ZWL equivalent at prevailing rate) per year of assessment.

What are the conditions for the employment of physically disabled persons?

The taxpayer shall be registered for tax purposes and tax compliant for the preceding year of assessment, provide medical reports from Government Hospitals proving disability of employee, comply with National Social Security Authority (NSSA) regulations;
The credit will only be claimed after the employee has served the particular organisation for a period of 12 consecutive months.
The Commissioner shall not refund any excess credit if the credit exceeds the tax payable during the year of assessment. Excess credit shall be carried forward to the next year of assessment.
Where the taxpayer has an assessed loss during the year of assessment, the credit shall be added to the assessed loss and the amount is carried forward to the next year of assessment.

Please note that the taxpayer will allow the credit when computing QPDs and on the Self-Assessment returns and shall not be required to apply for approval. Employers can only claim the credit in the year the employees are engaged if, the employees are engaged on 1^st of January. For any other period, other than 1^st of January, the credit is claimable only in the following year of assessment.

My Taxes, My Duties: Building my Zimbabwe!!

Disclaimer

Obligation to furnish returns and information

All persons carrying out business in Zimbabwe are required by law to furnish returns and information. They are also obliged to keep and maintain records of business transactions and proper books of accounts. The returns, information, records of business transactions and books of accounts should be in English unless dispensation to the contrary has been granted by the courts or the Commissioner.

These records may include but not limited to; Books of accounts ledgers, cash books, journals, paid cheques payroll schedules and employee information, bank statements and deposit slips, stock sheets, invoices, credit notes, debit notes, computer records, bills of entry, consignment notes, and all other books of account relating to any trade.

Taxpayers are required to observe the following:

All business records and books of accounts be prepared and kept in the English language.
All business records and books of accounts be kept for a minimum period of six (6) years.
All business records and books of accounts be open and available for inspection by a ZIMRA officer as may be required
All business records and books of accounts be available for retrieval, in the original form or copied, by a ZIMRA officer as may be required.
Where the records and books of accounts are kept on a computer, the officer should have access to them for inspection and/or retrieval from such computer or other computer-related gadgets or media.

Please be advised that any person shall be guilty of an offence and liable to a fine not exceeding level seven or to imprisonment for a period not exceeding three months or to both such fine and such imprisonment If the person:

Fails or neglects to furnish, file or submit any return or document required by the Commissioner
Refuses or neglects to furnish any information, reply to, attend to and give evidence as and when required by the Commissioner or any officer duly authorized by him,

Legal Provision to furnish returns and Information

Section 39 of the Income Tax Act [Chapter 23:06]
Section 59 of the VAT Act [Chapter 23:12]
Section 223 of the Customs and Excise Act [Chapter 23:02]

Legal Provision to keep records

Section 37B of the Income Tax Act [Chapter 23:06]
Section 57 of the VAT Act [Chapter 23:12]
Section 223 of the Customs and Excise Act [Chapter 23:02]

My Taxes, My Duties: Building my Zimbabwe!!

Disclaimer

Motor Vehicles Imported Under Immigrant’s Rebate

Who is an immigrant?

“Immigrant” means any person who is a resident of Zimbabwe and enters Zimbabwe on return after having resided the outside country for a period of not less than two years or any shorter period as may be approved by the Minister; (Customs and Excise (Suspension) (Amendment) Regulations, 2022 (No. 257) as contained in statutory instrument 10 of 2022

What is a motor vehicle?

Motor Vehicle is defined as a vehicle admissible under Customs Tariff heading Nos. 87.02, 87.03 and 87.04: Provided that—
(i) Tariff heading 87.02 shall not apply to vehicles designed for transport of fifteen or more people, including the driver; and
(ii) Tariff heading 87.04 shall not apply to vehicles whose gross vehicle weight (GVW) exceed five tonne.

Legislation

On 17 January 2022, the Ministry of Finance and Economic Development published S.I. 9 of 2022 which inserted the following after subsection 10 of section 105 of the Customs and Excise [General] Regulations, 2001:

(11) A rebate may be granted in terms of this section to any person who has previously resided in Zimbabwe, on returning to Zimbabwe, after having resided outside Zimbabwe only if the person left Zimbabwe for a period of not less than two years or any shorter period in the following cases—

(a) to take up employment on appointment or assignment by the government for not less than six months; or

(b) as a diplomat; or

S.I 10 of 2022 -For the purposes of this section, motor vehicles shall be treated as being owned by an immigrant only if such motor vehicle were in physical existence and fully paid for by the immigrant at least six months before the time of his or her arrival.

(3) Subject to this section, a suspension of duty may be granted in respect of motor vehicles, imported by an immigrant if such motor vehicles—

(a) are shown to the satisfaction of the Commissioner to have been owned by such immigrant at least six months before the time of his or her arrival and at the time of their importation;

(b) are intended for personal use in Zimbabwe by such immigrant but not for trade or commercial purposes;

(c) are imported at the time of arrival of such immigrant or at such time as the Commissioner may, in his or her discretion approve;

(d) have an import value that is not in excess of forty thousand United States dollars.

(4) No suspension shall be granted in terms of this section in respect of—

(a) any motor-vehicle imported by an immigrant who is, at the time of his or her arrival, under the age of sixteen years; and

(b) more than one motor-vehicle imported by an immigrant; and

(5) Any suspension under this section shall not be granted more than once during any period of four years.

(6) Any immigrant to whom a suspension of duty has been granted in terms of this section shall with effect from 1st January, 2022, for a period of 2 years after the granting of the suspension— (a) notify the Commissioner of any change of their residential address within fourteen days of the date of such change; and

(b) report to the nearest Customs office once every year, failure of which full duty waived at the time of importation shall become due and payable.

My Taxes, My Duties: Building my Zimbabwe!!

Disclaimer

Authentication of a tax clearance

Withholding tax on tenders is deducted from taxpayers who fail to furnish the paying officer with valid Tax Clearance Certificates in terms of Section 80 of the Income Tax Act (Chapter 23:06).

What is the rate and threshold of withholding tax on tenders?

The rate of withholding tax on tenders is 30% and the threshold is an aggregate of ZWL$130,000.00 or US$ 1,000.00 during the year of assessment effective 1 January 2022.

Consequences of failure to withhold the tax

A registered taxpayer who fails to withhold or to pay the Commissioner any amount required to be withheld from a payee in terms of of Section 80 of the Income Tax Act (Chapter 23:06) shall be liable for the payment to the Commissioner, not later than the date on which payment should have been made if the amount had been withheld.

To avoid the inconvenience, follow the following easy steps and authenticate the tax clearance of your Business partners:

Option 1 - Recommended Option

Type http://efiling.zimra.co.zw on your Internet Browser
Press Enter
Click Validate Tax Certificate
On the page that comes up:
Enter the BP number on the tax certificate in the Business Partner Number field
Enter the Authentication Code as it appears on the tax certificate in the Code field
Type the code for the image as shown in the field available.
Click Verify Certificate
Make sure the details that will appear on the internet page are the same as on the tax certificate being verified.

Option 2 – use of bar code reader

This option allows you to scan the bar code on the ITF 263 using a bar code reader or a smart phone.

Option 3 – Applicable in cases of doubt

Send a scanned copy of the ITF 263 to This email address is being protected from spambots. You need JavaScript enabled to view it., This email address is being protected from spambots. You need JavaScript enabled to view it.
ZIMRA will respond with confirmation whether or not the ITF 263 is authentic.

Option 4 - https://efiling.zimra.co.zw:333: For clearances which are automatically generated and sent to clients’ email addresses from SAP.

Please note:

Where you fail to validate the tax clearance online, contact ZIMRA on the following emails for assistance:

This email address is being protected from spambots. You need JavaScript enabled to view it.
This email address is being protected from spambots. You need JavaScript enabled to view it.
This email address is being protected from spambots. You need JavaScript enabled to view it.
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This email address is being protected from spambots. You need JavaScript enabled to view it.

Please take note of the importance of withholding 30% from your suppliers that do not have valid tax clearance certificates to avoid the inconvenience of having to pay the withholding tax on behalf of your suppliers.

My Taxes, My Duties: Building my Zimbabwe!!

Disclaimer

Drawback of duty

A duty drawback is a refund of Customs duties, taxes and fees paid on imported items that are subsequently exported. It is granted on imported goods not used in Zimbabwe and which are exported within two years from the date on which duty was paid thereon. Types of duty drawback 1. Same State Drawback This is when the goods are imported into Zimbabwe and subsequently exported without being used in Zimbabwe. Example: A company imports goods and pays all duties due on importation then later realises that the goods are faulty and decide to export them unused. In this case, the company can apply for a drawback of the duty paid on importation. 2. Industrial Drawback Applies to raw materials imported into Zimbabwe for processing and then the finished products are exported. The materials used in manufacturing must be accounted for to the satisfaction of the Commissioner of the Zimbabwe Revenue Authority (ZIMRA). Example: Company XYZ imports rolls of fabrics and uses it to make dresses and subsequently exports them. A drawback of duty can be applied for, provided the company can account for the fabric imported for use in the manufacture of the dresses. Conditions for drawback of duty • The goods shall not be used in Zimbabwe. • Exportation of goods shall be done within two (2) years from the date on which duty was paid. • The goods shall only be dispatched from a place at which there is a customs house or customs post. The exporter, before the goods are exported, shall tender to an officer at the place from which the goods are to be dispatched an application for drawback on form No. 44, together with the original invoices relative to the goods, in addition to the bill of entry or other documents to be presented prior to exportation. 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.

Public Officers

Appointment of Public Officers

Section 61 of the Income Tax Act [Chapter 23:06] stipulates that every company which carries on a trade or has an office or other established place of business in Zimbabwe shall at all times be represented by an individual residing therein as a Public Officer. The Public Officer should be appointed within one month from the establishment of the company’s office or other place of business. Such individual shall be appointed by the company or by an agent or legal practitioner who has authority appointment authority and shall have to be approved by the Commissioner. If a company fails to appoint one, the Public Officer of such a company the managing director, director, secretary or other officer of the company as the Commissioner may designate a representative for that purpose.

Role of the Public Officer

Receive all communications from ZIMRA including every notices, processes or proceedings which may be given, served upon or taken against the organisation, made to the attention of the Public Officer.
A public officer can be an agent of such company, a person acting or appearing to act in the management of the business or affairs of such company.
Anything done by the public officer while acting for the company is deemed done by the company which he/she represents. That is, Public Officer is answerable for any omission or commission done or to be done by the company in terms of the tax law.
Every Public Officer shall be answerable for the doing of all such acts, matters or things as are required to be done by a taxpayer under the Income tax Act. In case of default by a taxpayer the public officer is also liable to the penalties.
Public Officer acts as the voice or representative of the taxpayer/company/organisation regarding tax matters and represents the company in any meetings with ZIMRA.

ZIMRA Requirements for registration of public officers

All Public Officers must register with ZIMRA. The Authority has put in place instructions for its staff to discuss company tax matters with the Public Officers only, unless authorised by the Public Officer to handle the issues with any other person. Requirements for registration of public officers are as follows:

Letter of appointment as public officer, stating the full name, identity number (ID) number, residential address and a statement to the effect that the public officer is a signatory to the company’s bank account
Proof of residence in form of utility bills, support with affidavit if not in your name
Certified copies of identity documents for Public Officer/ Representative.

My Taxes, My Duties: Building my Zimbabwe!!

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Zimbabwe Revenue Authority

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Authorized Economic Operator (AEO) Programme

Exportation of goods under Regional Trade Agreements (RTA) & Free Trade Area (FTA)

Capital Gains Tax on cession agreements

Tax credits for corporates

Obligation to furnish returns and information

Motor Vehicles Imported Under Immigrant’s Rebate

Authentication of a tax clearance

Drawback of duty

Public Officers

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