{"id":69996,"date":"2022-11-25T13:29:27","date_gmt":"2022-11-25T11:29:27","guid":{"rendered":"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/deferment-of-value-added-tax-minimum-threshold-raised-from-us-500k-to-us1-million"},"modified":"2022-11-25T15:54:33","modified_gmt":"2022-11-25T13:54:33","slug":"deferment-of-value-added-tax-minimum-threshold-raised-from-us-500k-to-us1-million","status":"publish","type":"post","link":"https:\/\/www.africa-press.cc\/zimbabwe\/all-news\/deferment-of-value-added-tax-minimum-threshold-raised-from-us-500k-to-us1-million","title":{"rendered":"Deferment Of Value-Added Tax: Minimum Threshold Raised From US$ 500k To US$1 million"},"content":{"rendered":"

Africa-Press – Zimbabwe. <\/strong><\/span>Finance Minister Mthuli Ncube has announced that the minimum threshold for deferment of Value-Added Tax (VAT) has been raised from US$500 000 to US$1 million.<\/p>\n

The government sanctioned temporary postponement of paying VAT on the importation of specified goods of a capital nature imported by companies in the manufacturing, agriculture, mining, aviation transport and health sectors.<\/p>\n

In his 2023 national Budget presentation, Ncube noted that the facility was being abused. He said:<\/p>\n

Whereas the VAT deferment facility was put in place to mitigate the cash flow impact on business, the benevolence has, however, been abused by most of the beneficiaries through non-payment after the due date.<\/p>\n

I, therefore, propose to review the minimum threshold for the deferment facility from the current US$ 500 000 to US$ 1 million, with effect from 1 January 2023, in order to mitigate revenue loss to the Fiscus.<\/p>\n

On the prescribed period for submission of Tax Returns and Payment of Corporate Income Tax, Ncube said:<\/p>\n

Specified taxpayers are compelled to submit self-assessment returns not later than four months after the end of the tax year or year of assessment which begins in January and ends in December.<\/p>\n

This legislative requirement does not, however, cater for circumstances where taxpayers have approved financial periods that end on a date other than end of a year of assessment.<\/p>\n

I, therefore, propose to compel taxpayers with a year of assessment other than the tax year to submit self-assessment returns no later than four months after the year of assessment approved by the Commissioner.<\/p>\n

As a consequence of the proposed measures, quarterly payment dates for such taxpayers will be aligned to the approved year of assessment.<\/p>\n

Ncube told Parliament that the Bank Policy Rate was reviewed to 200%, with effect from 24 June 2022 to curb speculative borrowing and to stabilise the exchange rate.<\/p>\n

He said interest on outstanding tax remains at 25%. Ncube added:<\/p>\n

Tax revenue has, thus, become a cheaper source of working capital, hence, some companies no longer prioritise remittance of tax, to the detriment of the Fiscus.<\/p>\n

In order to limit accumulation of tax debts, I, propose to align the interest rate on local currency tax debts from 25% to the Bank Policy Rate, with effect from 1 December 2023.<\/p>\n

The interest rate on foreign currency tax debts will, however, remain at 10% per annum.<\/p>\n

Ncube also said some taxpayers were deliberately delaying payment of tax obligations in order to benefit from the loss of value.<\/p>\n

He said while charging higher interest on outstanding taxes remains an option, additional measures were necessary to induce compliance. Said the minister:<\/p>\n

I, therefore, propose that all outstanding tax debts be converted to the foreign currency equivalent at the time the debt is incurred.<\/p>\n

Payment of outstanding tax will, however, be made in local currency using the prevailing interbank exchange rate at the time of payment.<\/p>\n

Mr Speaker Sir, financial institutions are a critical conduit for the real-time remittance of tax payments to the Consolidated Revenue Fund (CRF).<\/p>\n

However, a number of financial institutions are delaying remittance of tax payments to the CRF, thereby depriving the Fiscus of resources to fund critical Government expenditure.<\/p>\n

Some of the financial institutions are also utilising the funds as a cheap source of overnight liquidity support.<\/p>\n

I, therefore, propose to compel financial institutions to remit tax collections to the CRF within 48 hours of receipt from taxpayers.<\/p>\n

Where financial institutions fail to meet the prescribed timeline for remittance, interest will be chargeable at a rate of 15% and the Bank Policy Rate, currently pegged at 200%, on local and foreign currency remittances, respectively.<\/p>\n

For More News And Analysis About Zimbabwe<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Zimbabwe. Finance Minister Mthuli Ncube has announced that the minimum threshold for deferment of Value-Added Tax (VAT) has been raised from US$500 000 to US$1 million. The government sanctioned temporary postponement of paying VAT on the importation of specified goods of a capital nature imported by companies in the manufacturing, agriculture, mining, aviation […]<\/p>\n","protected":false},"author":84,"featured_media":69995,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,6],"tags":[1493,2189,12913,807,19],"class_list":{"0":"post-69996","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-all-news","8":"category-economy","9":"tag-africa-press","10":"tag-africa-press-zimbabwe-2","11":"tag-deferment-of-value-added-tax","12":"tag-mthuli-ncube","13":"tag-zimbabwe"},"yoast_head":"\nDeferment Of Value-Added Tax: Minimum Threshold Raised From US$ 500k To US$1 million - zimbabwe<\/title>\n<meta name=\"description\" content=\"Finance Minister Mthuli Ncube has announced that the minimum threshold for deferment of Value-Added Tax (VAT) has been r ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/deferment-of-value-added-tax-minimum-threshold-raised-from-us-500k-to-us1-million\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Deferment Of Value-Added Tax: Minimum Threshold Raised From US$ 500k To US$1 million\" \/>\n<meta property=\"og:description\" content=\"Finance Minister Mthuli Ncube has announced that the minimum threshold for deferment of Value-Added Tax (VAT) has been r ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/deferment-of-value-added-tax-minimum-threshold-raised-from-us-500k-to-us1-million\" \/>\n<meta property=\"og:site_name\" content=\"zimbabwe\" \/>\n<meta property=\"article:published_time\" content=\"2022-11-25T11:29:27+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-11-25T13:54:33+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/zimbabwe\/sites\/14\/2022\/11\/postQueueImg_1669370387.74.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"533\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/deferment-of-value-added-tax-minimum-threshold-raised-from-us-500k-to-us1-million\",\"url\":\"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/deferment-of-value-added-tax-minimum-threshold-raised-from-us-500k-to-us1-million\",\"name\":\"Deferment Of Value-Added Tax: Minimum Threshold Raised From US$ 500k To US$1 million - 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