Rebate of duty on goods imported by a person engaged in the mining industry

According to Section 120 (1) (b) of the Customs and Excise Act Chapter 23:02 as read with Section 113(1) of Statutory Instrument 154 of 2001 (General Regulations) there is a rebate of duty on goods imported by a person engaged in the mining industry?

 

The rebate is granted only in respect of the following goods which are imported or taken out of Bond by persons engaged in the Mining Industry;

1. Eucalyptus, pine and other oils for use in the extraction of gold and other minerals by the flotation process;
2. Chemical substances, other than spirits, methylated spirits, fuel oils, lubricants and nitrate of lead, for use in any process for the concentration or refining of ore, or for assay or research purposes.

1. To benefit from this rebate, client should submit to the nearest ZIMRA office for onward transmission to the Regional office or direct to the Regional office, the documents listed below:
2. Application Letter

1. Letter of Undertaking to the effect that the articles shall be used solely for the purpose for which the rebate is granted and if they are sold or otherwise disposed of the duty rebated shall be paid forthwith to the Commissioner
2. Proforma Invoice showing the Full Description and Quantity of the Goods to be imported under the rebate
3. End User’s Certificate
4. A letter from the Mining Commission to Confirm the Existence of that Mine.
5. Current (Valid) Tax Clearance

At the time of the clearance of the goods, the importer shall be required to attach the Rebate Letter to the bill of entry form 21. The respective Regional Office shall issue a Rebate Letter specific to the Products listed in the Application and the Proforma Invoice.

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

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. 

Most taxpayers face challenges in resetting their passwords for e-services on ZIMRA portal. Detailed below are steps to follows. Kindly use the following Forgot/ Reset Password procedure and check for the default password in inbox or trash/junk folder: Visit the ZIMRA portal page on internet by typing http://efiling.zimra.co.zw on the internet browser and log-in to ZIMRA e-Services Portal Click on the “Forget Password” option, forgotten Password screen will come up Enter your email and Captcha (code for the image) Click on “Submit” and the security question which you provided on registration screen will come Enter the correct answer to the security question which you provided on registration and click on “Submit” A default password will be sent to the email stated on initial application, Use the default password to log in and you will be prompted to change the default password NB: Kindly note that when entering the default password:   highlight it with the mouse (no spaces before or after)    right click it,    copy,   go to the password field,   right click and    paste 8.     Enter the default password as your current password 9      Enter your new password and confirm it.

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 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.

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. 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 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.

What is a non – executive director?

• A non-executive directoris a member of a company's board of directors who is not part of the executive team. A non-executive director typically does not engage in the day-to-day management of the organization but is involved in policymaking and planning exercises.

 

Are Non – executive Directors’ Fees subject to withholding tax?

• If no other amount constituting remuneration is payable to the director by the corporate body, the non – executive directors’ fees are subject to Withholding Tax on Directors’ fees.

Who withholds tax on the Non – executive Directors’ fees?

• The tax is deducted and remitted to the Commissioner by the company paying the fees, within ten days of the date of payment.

What is the rate of the Withholding Tax on Non – Executive Directors’ Fees?

• The director’s fees payable to non-executive directors are subject to 20 percent withholding tax in terms of the 33rd Schedule of the Income Tax Act.

When and how should the withholding tax on non- executive directors’ fees be remitted to ZIMRA?

• The tax is deducted and remitted to the Commissioner by the company paying the fees, within ten days after the date of payment

Are there any other tax requirements for Non – executive directors’ fees besides the Withholding Tax on directors’ fees?

• With effect from 1 January 2020, fees accruing to a non-executive director are now subject to a final withholding tax of 20%.
• This means non-executive directors are no longer required to pay Quarterly Payment Dates (QPD) on the directors’ fees or declare the fees on Income Tax.
• With effect from 1 January 2020, non – executive directors are no longer required to produce a tax clearance certificate upon receiving fees.
• In cases where the non-executive director earns or is entitled to an amount equal to ZWL4, 800,000.00 in respect of fees or other business income, in a tax year, they must register for VAT in terms of the VAT Act [Chapter 23.12]. In such a case, the director will be liable to pay and file VAT returns.

This tax treatment for non-executive directors fees applies to what type of companies?

• The taxation requirements of non-executive directors as highlighted above applies to non – executive directors employed by private, public and statutory corporations.

Penalties and interest for late remittances of tax

 

• Taxpayers are encouraged to pay their taxes on time and in full in order to avoid unnecessary penalties and interest, which are levied on latepayments.

It is a requirement that all vehicles being imported into Zimbabwe from countries which experienced nuclear incidents be inspected for radiation contamination.  The requirement is in terms of Statutory Instrument 281 of 2020; Radiation Protection (Safety and Security of Radiation Sources) (Amendment) Regulations 2020 (No.5).

Affected vehicles

Persons who import motor vehicles into Zimbabwe from countries that have experienced nuclear disasters directly or indirectly are required to submit Form RP1 which is a declaration of inspection for radiation contamination of vehicles. The form should be submitted at the Port of Entry to officers of the Radiation Authority of Zimbabwe (RPAZ), prior to clearance of the motor by the Zimbabwe Revenue Authority.

Testing procedure

A prescribed fee will be paid before tests are conducted for radiation contamination by officers of the Radiation Authority of Zimbabwe (RPAZ). A certificate of non-contamination is issued by RPAZ for a motor vehicle free of radiation. RPAZ officers shall de-contaminate any vehicles found to be contaminated at a prescribed fee to be paid by the importer.

Clearance procedure

The certificate of non-contamination together with import documents such as invoices consignment notes, bills of lading are then presented to the Zimbabwe Revenue Authority officials for customs clearance of the vehicle.

 

NB: Any person who fails to submit the Form RP1 at the port of entry and/or fails to ensure the vehicle is subjected to radiation contamination inspection or any person who makes a false statement or declaration or falsifies any documents concerning the country of origin of a vehicle shall be guilty of an offence and liable to a fine not exceeding level 5 or imprisonment for a period not exceeding six months or both such fine and such imprisonment.

The Customs and Excise Act stipulates requirements on clearance of goods on import, export and on excisable goods. This is in line with its mandate to collect revenue, facilitate trade and travel, advise government on fiscal and economic matters and protection to civil society.

Part XIII of the Customs and Excise Act CAP 23.02 deals with Offences and their penal provisions so it is important for Clearing Agents, Importers and Exporters to familiarise themselves with this Part of the Act. It is however important to know that other offences are also covered in other parts of the Customs and Excise Act and in the Customs and Excise General Regulations. Knowing what constitutes an offence in the Customs and Excise Act helps businesses avoid unnecessary fines, which are an irrecoverable cost to them.

Statutory Instrument 25 of 2021 reviewed the fines as follows with effect from 25 January 2021;

LEVEL	MONETARY AMOUNT(ZWL$)
1	1000
2	2000
3	5000
4	20 000
5	30 000
6	60 000
7	120 000
8	200 000
9	240 000
10	280 000
11	400 000
12	800 000
13	1 200 000
14	1 600 000

 

Example 1

Failure to comply with import controls as stipulated in Section 48 of the Customs and Excise Act CAP 23.02 attracts a level 12 fine of ZWL800 000. *N.B. controls are not on quantity but on the nature of the product.

 

 

 

Example 2

Failure to preclear commercial goods as prescribed in Section 18(12) of the Customs and Excise General Regulations SI 154 of 2001 (as amended) attracts a level 7 fine of ZWL120 000.

Other examples of common offences that may attract heavy fines as stipulated in the above SI which many importers, exporters, travelers and clearing Agents ignore include (but are not limited to) the following:

• Making false statements or false declarations to Customs
• Producing false invoices or documents with the intention to deceive Customs Officials or evading payment of full duty.
• Importation or possession of blank invoices
• Smuggling
• Availing one’s vehicles for use in smuggling activities.
• Removing labels, marks or seals to deceive Customs
• Importing controlled goods without the required permit.

Importers are therefore urged to comply with the provisions of the Customs and Excise Act in order to facilitate trade and in the process avoid incurring extra costs in fines and inconveniences due to delays at the time of importation.

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

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. 

According to Section 120 (1) (b) of the Customs and Excise Act Chapter 23:02 as read with Section 113(1) of Statutory Instrument 154 of 2001 (General Regulations) there is a rebate of duty on goods imported by a person engaged in the mining industry?

 

The rebate is granted only in respect of the following goods which are imported or taken out of Bond by persons engaged in the Mining Industry;

1. Eucalyptus, pine and other oils for use in the extraction of gold and other minerals by the flotation process;
2. Chemical substances, other than spirits, methylated spirits, fuel oils, lubricants and nitrate of lead, for use in any process for the concentration or refining of ore, or for assay or research purposes.

1. To benefit from this rebate, client should submit to the nearest ZIMRA office for onward transmission to the Regional office or direct to the Regional office, the documents listed below:
2. Application Letter

1. Letter of Undertaking to the effect that the articles shall be used solely for the purpose for which the rebate is granted and if they are sold or otherwise disposed of the duty rebated shall be paid forthwith to the Commissioner
2. Proforma Invoice showing the Full Description and Quantity of the Goods to be imported under the rebate
3. End User’s Certificate
4. A letter from the Mining Commission to Confirm the Existence of that Mine.
5. Current (Valid) Tax Clearance

At the time of the clearance of the goods, the importer shall be required to attach the Rebate Letter to the bill of entry form 21. The respective Regional Office shall issue a Rebate Letter specific to the Products listed in the Application and the Proforma Invoice.

What are Foreign Currency Designated Goods?

The government promulgated Statutory Instrument (SI) Number 252A of 2018 on 23 November 2018 which provides for the payment of duty for selected goods in any currency other than the bond notes in all its forms. For those designated goods, it therefore means that the importer shall pay any duty and import or value-added tax payable on such item in United States dollars. This article serves as a guidance to would be importers on whether electric vehicles pay duty in foreign or local currency. There has been a lot of misunderstanding on the classification and duty payment for electric vehicles.

What is an Electric Vehicle?

Electric vehicles are generally divided into all-electric or battery electric vehicles that run only on batteries, and plug in hybrids, that combine battery power with internal combustion engines. A common hybrid vehicle is the Honda Fit Hybrid. The popularity of electric vehicles has been expanding rapidly due to low or no fuel costs. There are three main types of electric vehicles (EVs), classed by the degree that electricity is used as their energy source:

• Hybrid Electric Vehicles (HEVs): HEVs are powered by both petrol and electricity
• Plug-in Hybrid Electric Vehicles (PHEVs): Also known as Extended-Range Electric Vehicles (EREVs), this type of EV is powered by both petrol and electricity
• Battery Electric Vehicles (BEVs): BEVs are fully electric vehicles, meaning they are only powered by electricity and do not have a petrol engine, fuel tank or exhaust pipe.

Does an electric vehicle pay duty in foreign currency or Zimbabwean Dollars?

The foreign currency value on importation shall be converted to Zimbabwean dollars at the international cross rate of exchange prevailing on the day of the conversion, where the duty shall be calculated upon and payable in local currency. The drag net for foreign currency designated goods includes all vehicles classified as luxury vehicles.

 

What is the classification of an electric vehicle?

Under customs harmonized systems classification such vehicles are classified on tariff 87034000 and 87035000.

 

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

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. 

Value Added Tax withholding Tax

Withholding of Value Added Tax (VAT) was introduced with effect from 1 January 2017 and some registered operators have since been appointed as VAT Withholding Tax agents. The VAT Withholding Tax agents’ role is to withhold a portion of the VAT when paying their suppliers who are registered for VAT.

What is Value Added Withholding Tax?

It is tax withheld by appointed agents when they pay their suppliers for the acquisition of taxable goods and services.

From whom should the tax be withheld?

VAT withholding agents should withhold tax from their suppliers who are registered for VAT. VAT withholding tax shall be withheld on payments of standard rated supplies. No VAT shall be withheld on payment for the supply of exempt and zero-rated supplies.

What is the rate of Value Added Withholding tax?

The rate of Value Added withholding tax shall be 1/3 of the output tax (VAT charged). In cases where payment of the supply is made in instalments, VAT shall be withheld on the output tax on each instalment.

What is the supplier supposed to do?

The supplier must:

• Receive a VAT withholding tax certificate from the agent.
• Claim the VAT withheld as a credit on submission of VAT returns.
• Attach a schedule of amounts withheld by various agents to the VAT return.
• Keep the tax certificates obtained from withholding agents for a period of six years.

NB: The VAT withholding tax deducted will reduce the amount of VAT payable during the tax period or increase the refundable amount.

Should a supplier supply less goods and or services because VAT has been withheld?

The amount withheld is VAT and it is remitted to ZIMRA by the agent. The supplier claims the tax as a credit on the VAT return which means the tax is an advance payment. Therefore, the supplier is not supposed to supply less goods or services following the withholding of the tax.

 

How is the VAT Withholding Tax paid?

Every value added withholding tax agent shall withhold and remit to ZIMRA from each amount to be paid to an operator, in the currency in which the goods and services concerned were purchased. 

Below is a consolidated list of all Value Added Withholding Tax Agents who were appointed in terms of Section 50A of the Value Added Tax Act [Chapter 23:12].

		NAME OF REGISTERED OPERATOR	BP NUMBER			NAME OF REGISTERED OPERATOR	BP NUMBER
	1	Ashanti Goldfields Zimbabwe Ltd	200001153		41	Econet Wireless (Pvt) Ltd	200002652
	2	Trojan Nickel Mine Ltd	200000085		42	Net One Cellular (Pvt) Ltd	200004531
	3	Afrochine Smelting (Pvt) Ltd	200116318		43	Telecel Zimbabwe (Pvt) Ltd	200002516
	4	Blanket Mine (1983) (Pvt) Ltd	200005489		44	Dairibord Zimbabwe (Pvt) Ltd	200002472
	5	Xin Yu Mining Corporation (Pvt) Ltd	200086880		45	Cairns Foods (Pvt) Ltd	200001266
	6	Falcon Gold Zimbabwe (Pvt) Ltd	200004871		46	Powerspeed electrical (Pvt) Ltd	200001231
	7	Well Mining (Pvt) Ltd	200063486		47	Zimkings Trading (Pvt) Ltd	200109847
	8	Niarchos Investments (Pvt) Ltd	200172519		48	Picktalk Investments (Pvt) Ltd	200083717
	9	Bulawayo Mining Company Ltd	200135654		49	N Bhadella and Sons	200001074
	10	Goldfields of Shamva (Pvt) Ltd	200135652		50	British American Tobacco Zimbabwe	200000923
	11	Goldfields of Shamva (Pvt) Ltd	200135648		51	Schweppes Zimbabwe (Pvt) Ltd	200002313
	12	The King’s  Daughter Mining Company (Pvt) Ltd	200135651		52	Applebridge Investments (Pvt) Ltd	200181725
	13	Mimosa Mining Company (Pvt) Ltd	200002575		53	Corundum Mining Company	200029962
	14	Murowa Diamonds (Pvt) Ltd	200006188		54	Natural Stone Export Company	200003307
	15	Unki Mines (Pvt) Ltd	200023164		55	RHA Tungsten (Pvt) Ltd	200147126
	16	Zimasco (Pvt) Ltd	200002780		56	Zimbabwe German Graphite Mines	200001444
	18	Zimbabwe Platinum Mines (Pvt) Ltd	200003122		57	Southern Granites( Pvt ) Ltd.	200000638
	19	RioZIM Limited	200000204		58	Quarrying Enterprises (Pvt) Ltd	200002191
	20	Pan African Mining (Pvt) Ltd	200005440		59	Newtron Mining ( Pvt) Ltd	200080297
	21	Forbes and Thompson (Pvt) Ltd	200001460		60	Kadoma Magnesite (Pvt) Ltd	200006427
	22	Bikita Minerals (Pvt) Ltd	200002810		61	Jin An Corporation (Pvt) Ltd	200078190
	23	Mohammed Musa Wholesalers (Pvt) Ltd	200000977		62	Inducon Investments (Pvt) Ltd	200127727
	24	N. Richards and Company Masvingo	200000597		63	Ilford Services (Pvt )Ltd	200001952
	25	TM Supermarkets P/L	200000676		64	Innscor Distribution (Pvt )Ltd	200000604
	26	Ok Zimbabwe P/L	200000192		65	Comox Trading (Pvt )Ltd	200007380
	27	Padenga Holdings Ltd	200095242		66	Eagle Agencies (Pvt )Ltd	200084638
	28	Beta bricks P/L	200000917		67	Tevason Investments (Pvt )Ltd  t/a  Freshpro	200066312
	29	Willdale (Pvt) Ltd	200002508		68	Equip Solutions (Pvt )Ltd	200153328
	30	Lafarge Cement Ltd	200000104		69	FMCG Distribution (Pvt ) Ltd	200002081
	31	PPC Zimbabwe Ltd	200000840		70	Exclusive Brands (Pvt ) Ltd	200123978
	32	Blue Ribbon Foods (Pvt) Ltd	200000088		71	Viative Trading (Pvt ) Ltd	200005190
	33	National Foods Ltd	200062202		72	Bullred Farming	200019187
	34	Profeeds (Pvt) Ltd	200065254		73	Brands Africa (Pvt ) Ltd	200093781
	35	Novatek Animal Feeds (Pvt) Ltd	200120831		74	Brands Fresh (Pvt ) Ltd	200164053
	36	Parrogate Zimbabwe (Pvt) Ltd	200028728		75	Aeromat [Cheeseman]  (Pvt ) Ltd	200048286
	37	Zimbabwe Power Company	200011622		76	The Cold Chain (Pvt ) Ltd	200002320
	38	ZESA Holdings	200001442		77	Harrison & Hughson Agencies	200002054
	39	Zimbabwe Electricity Transmission and Distribution Company [ZETDC]	200019701		78	Seedex Enterprises (Pvt ) Ltd	200000214
	40	Delta Beverages (Pvt) Ltd	200000672
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 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: WhatsApp line:                           +263 782 729 862   Visit our website:                         www. zimra.co.zw Follow us on Twitter:                   @Zimra_11 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