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ZIMRA rakes $60m from vendors

by Staff Reporter
12 Jan 2020 at 08:35hrs | Views
ABOUT 16 000 Small to Medium Enterprises (SMEs) registered to formalise operations of their businesses last year with the Zimbabwe Revenue Authority (Zimra) raking about $60 million from the new registrants in the process.

According to information obtained by Sunday News Business the number of registered taxpayers increased by 61 252 from 2017 to last year with the revenue collection body collecting a total of $118 274 233,24 in taxes in the three years.

Last year registered taxpayers increased by 15 664 and $57 305 840,51 was collected in tax revenue from new registrants.

Zimra head of corporate communications Mr Francis Chimanda expressed satisfaction at the rate at which SMEs were formalising operations of their businesses over the past few years.

"Zimra is satisfied with the rate at which SMEs are formalising their operations. Stakeholder workshops were  held to educate them. We are in the process of fiscalising the sector and the process is under review to tap on more SMEs to account real time," he said.

Zimra has been carrying out door-to-door visits checking on compliance as well as issuance of conditional tax clearances to enforce payments as part of its efforts to collect revenue from SMEs.

"Various revenue enhancement measures were carried out by the division during the year. These include projects on lawyers, doctors, medical suppliers, hardware shops, presumptive tax, follow-ups on debtors, rentals and non- filers among others," said Mr Chimanda.

In 2017, Government approved the formalisation of SMEs at a time when Zim­babwe's tax base started shrink­ing as com­pa­nies either down­sized or closed shop, with the SMEs sec­tor tak­ing over as the coun­try's big­gest em­ployer.

SMEs reg­is­tered for in­come tax pur­poses with Zimra are el­i­gi­ble for ap­pli­ca­ble de­duc­tions pro­vided for in the In­come Tax Act in re­spect of ex­pen­di­ture re­lated to their op­er­a­tions.

However, Bulawayo Chamber of SMEs chairperson Mr Energy Majazi said he was not satisfied with the number of SMEs that have formalised operations of their businesses citing that most of them view pay­ing tax as an un­wanted cost to busi­ness rather than a nor­mal busi­ness prac­tice.

"I'm not satisfied by the way SMEs are formalising their business and the major issue has been the lack of resources and many SMEs fear the fact that once you formalise you are counted in the Zimbabwe taxation system and many SMEs are not knowledgeable on how the system works . . . ," he said

Taxes ap­pli­ca­ble to SMEs in­clude pre­sump­tive tax, in­come tax, value added tax, pay as you earn and with­hold­ing tax.

SMEs have become an integral part of the economy, and their contribution to the country's Gross Domestic Product has been growing over the years but Zimra has largely been unable to tap into the fast-growing sector.

Zimra has also been able to augment revenue collections from the formal sector over the years through rolling out its fiscalisation project, in which businesses have to use fiscal tax registers that capture financial information and relays it in real time to tax authorities.

"To date 10 735 clients have been fiscalised. Zimra is focusing on VAT registered Taxpayers for fiscalisation. Each year new taxpayers qualify for fiscalisation as they meet VAT thresholds. Zimra is satisfied with progress and reviewing the process in order to expand it," said Mr Chimanda.

He, however, said foreign currency shortages for the procurement of the electronic fis­calised cash reg­is­ters and fis­cal mem­ory de­vices was hampering the fiscalisation project.

Source - Sunday News