Tax compliance does not mean that employers should submit returns and payments to ZIMRA only. It also means that employers should calculate the correct Pay As You Earn (PAYE).
In calculating the tax due correct credits should be granted against tax due as taxpayers who receive income from employment are entitled to a number of credits.
Types of Credits
- Elderly person’s credit — a credit of USD900, 00 shall be deducted from the income tax of a taxpayer who has attained the age of 55 years. The taxpayer should have turned 55 years before the commencement of the year of assessment.
- Blind person’s credit — a credit of USD900, 00 shall be deducted from the income tax of a taxpayer who is blind. An unused credit for a blind person who is married can be transferred to his or her spouse.
- Invalid appliances and medical expenses — this credit is granted at the rate of 1 dollar for every 2 dollars paid.
“Invalid appliances” and “fittings” are defined as
- i) A wheelchair or a mechanically propelled vehicle which is specially designed and constructed to carry one person who has a physical defect or disability.
- ii) Artificial limbs ,leg callipers or crutches
iii) Any special fittings for the modification or adaptation of a motor vehicle, bed, bathroom or toilet to enable its use by a person suffering from a physical defect or disability.
- iv) Spectacles or contact lenses. “Medical expenses” means sum of any payments made by a taxpayer, his wife or minor child for
- i) The purchase, hire, maintenance, repair or modification of an invalid appliance or fitting which the Commissioner is satisfied is for use by a taxpayer, his wife or minor child who has a physical defect or disability.
- ii) Services received from a medical or dental practitioner.
iii) Purchase of drugs or medicine on a prescription from a medical or dental practitioner.
- iv) Hospitalisation, blood transfusions, X-rays, and laboratory test.
- v) Conveyance by ambulances.
- vi) Medical aid contributions made by the taxpayer for himself, spouse and minor children.
NB: No credit shall be granted if a taxpayer receives or is entitled to a refund from the medical aid society.
- Mentally or physically disabled person’s credit — i) A credit of USD900, 00 shall be granted to a taxpayer where it is proved to the satisfaction of the commissioner that the taxpayer is mentally or physically disabled to a substantial degree. ii) The taxpayer should not be blind.
iii) A credit of USD900,00 shall be deducted in respect of each child of a taxpayer who is not a married woman where it is proved to the satisfaction of the Commissioner that the child is mentally or physically disabled to a substantial degree
- iv) The unused credit is transferable between spouses.
- v) The credit is not granted to non-residents.
- vi) Credit shall not be granted if disability is of a temporary or transitional nature.
Any persons that have already failed to declare PAYE collected or accrued to from employees are encouraged to take advantage of the Voluntary Disclosure Programme currently in place and be compliant. No penalties shall be charged for late submission of returns under the Voluntary Disclosure Programme but interest remains due and payable. Benefits of making a Voluntary Disclosure under Voluntary Disclosure Program
◆ Penalties, civil penalties, fines and additional tax shall be waived in full ◆ Outstanding tax debts are paid on agreed payment terms
◆ Business is free from the burden of non-compliance
◆ Access to tax clearance certificates for compliant taxpayers
◆ Business managers and owners can focus on running their businesses thereby reducing costs of compliance.
Period covered by Voluntary disclosure Applications for voluntary disclosure shall be made until 31 December 2018. Assurances to the Applicant The information for voluntarily disclosed shall not trigger an audit, investigation or prosecution. Withdrawal of voluntary disclosure
The voluntary disclosure benefits shall be withdrawn where the client fails to honour payment arrangements agreed on with ZIMRA, without seeking for alternative agreement payment arrangements. For more information, please approach your nearest ZIMRA office.
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.
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