The Zimbabwe Revenue Authority (ZIMRA) encourages churches and other religious organisations to review their tax affairs and make voluntary disclosures where there is any income omitted from returns submitted or where there are any tax obligations that the taxpayer may not have complied with.
The intention is to encourage voluntary compliance from churches and other religious organisations and avoid being charged penalties, which affects business operations.
Churches and other religious organisations who omitted or failed to declare any amounts of income on returns submitted should make a voluntary disclosure. The following circumstances require churches and religious organizations to pay tax.
Income Tax on business profits
This tax is payable on business profits, that is, income derived from or deemed to be from a source within Zimbabwe.
The receipts and accruals of church or religious organisations are exempt from Income Tax only to the extent of donations, tithes, offerings or other contributions by its members. Incomes from other activities such as selling of items such as reading materials, wristbands, renting out properties and others are subject to Income Tax.
Employees’ Tax (PAYE)
Every person who becomes an employer is required to register for Pay As You Earn (PAYE) within 14 days of becoming an employer.
A church may qualify as an employer if it pays any type of remuneration such as salary, wage, allowance, among others, to its employees who administer church activities. In this case the organisation is required to deduct the correct PAYE every month according to the tax tables and remit it by the 10th of the following month.
Value Added Tax (VAT)
This is an indirect tax levied on goods and services. Churches or religious organisations may qualify to register for Value Added Tax (VAT) if the total value of taxable supplies made in the period of twelve months exceeds $60, 000. VAT payable should be remitted to ZIMRA by the 25th of the following month. Church organisations are not exempt from the payment of VAT when they purchase goods or services which are subject to VAT.
There are a number of Withholding Taxes chargeable in terms of the Income Tax Act. Examples are Non-Residents Tax on Fees, Non-Residents Tax on Royalties, Non-Residents Tax on Remittances and Withholding amounts payable under contracts. A church or its paying agent is expected to withhold the tax and remit it to ZIMRA in cases where a payment is made. Withholding taxes are supposed to be remitted by the 10th of the following month after payment or a deemed payment is made.
Reminder for VAT Due Date
Our valued clients are hereby reminded that the VAT for the month of October 2018 is due on or before the 25th of November 2018.
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.11 Send us an e-mail : email@example.comfirstname.lastname@example.org Call us (Head Office) : 04 –758891/5; 790813; 790814; 781345; 751624; 752731