The Zimbabwe Revenue Authority (ZIMRA) will descend heavily on businesses that are transacting in foreign currency but continue to meet their tax obligations in local currency, the taxman has warned.<\/p>\n
The warning comes in the wake of a notice published last week which reminded businesses that had been granted authority to transact in foreign currency to also meet their tax obligations in the same currency of trade.<\/p>\n
However, a number of businesses \u2014 with or without the Reserve Bank of Zimbabwe (RBZ) approval \u2014 have resorted to transacting in the US dollar in flagrant disregard of provisions of Statutory Instrument (SI) 142 of 2019, also known as Reserve Bank of Zimbabwe (Legal Tender) Regulations.<\/p>\n
In e-mailed responses to The Sunday Mail Business, the authority said it would soon carry out audits to check on businesses\u2019 compliance with requirements to pay tax in foreign currency.<\/p>\n
The tax collector also defended the move saying it is within the confines of the law.<\/p>\n
\u201cAll those who transact in forex are required by legislation to pay their taxes in the currency of transaction,\u201d said Zimra\u2019s head of corporate communications, Mr Francis Chimanda.<\/p>\n
\u201cZimra will carry out tax audits to check on compliance with the requirements to pay the tax in foreign currency. Non-compliance will be severely sanctioned through penalties, interest and prosecution,\u201d he said.<\/p>\n
However, Mr Chimanda said Zimra was not mandated with determining who can legally transact in foreign currency. This fell under the purview of the RBZ.<\/p>\n
Some of the sectors that have been exempted from the exclusive use of the Zimbabwean dollar include those in the export sector.<\/p>\n
Miners, for example, receive part of their payments in foreign currency.<\/p>\n
Those in the tourism sector have also been exempted and are legally allowed to charge tourists in foreign currency.<\/p>\n
Zimra is currently collecting an average of $30 million per month in foreign currency tax. The latest clampdown could see this figure ballooning.<\/p>\n
\u201cOn average, Zimra collects $30 million per month in foreign currency (for both customs duties and inland taxes). There are legal provisions for the collection of taxes in foreign currency,\u201d said Mr Chimanda.<\/p>\n
\u201cThe forex collections are done in terms of SI 252A of 2018 for luxury goods as well as provisions in the Income Tax Act, VAT Act and CGT Act, etc.<\/p>\n
\u201cPut simply, the law requires that where a business transacts in foreign currency, the taxes due flowing from the business activity should be remitted in the currency in which the business transaction is undertaken,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Zimbabwe Revenue Authority (ZIMRA) will descend heavily on businesses that are transacting in foreign currency but continue to meet their tax obligations in local currency, the taxman has warned. The warning comes in the wake of a notice published last week which reminded businesses that had been granted authority to transact in foreign currency […]<\/p>\n","protected":false},"author":84,"featured_media":18917,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,12],"tags":[187,725],"class_list":{"0":"post-18916","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-all-news","8":"category-policy","9":"tag-forex","10":"tag-zimra"},"yoast_head":"\n