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MONTHLY TAX UPDATES
“Practical Tax Solutions”
JULY2018
46 Van Praagh Ave, Milton Park, Harare, ZimbabweTel: +263 4 252 816, +263 4 252 850 | Cell: +263 775 911 383
www.taxmatrix.co.zw
Jesca Nyasha MagamaTax Manager
+263 783 267 851
Tinashe KaruwaSenior Tax Consultant
+263 784 052 269
Marvellous TaperaManaging Director+263 772 349 740
Eliphas MoyoAssociate Director+263 772 101 185
Cecilia MaketaTax Consultant
+263 773 881 853
Bradley PostTax Consultant
+263 779 602 351
Page 1 of 23
Contents
1. Introduction .................................................................................................................................. 2
1.1 Executive Summary ................................................................................................................... 2
Tax and Business Interface Week dates................................................................................................ 2
Marvellous Tapera MD – Tax Matrix................................................................................................. 3
1.2 Tax Matrix News and Developments ........................................................................................ 4
1.2.1 Matrix Tax School (Pvt) Limited ............................................................................................ 4
1.2.2 Tax and Business Interface Week dates ................................................................................ 5
1.2.3 Taxation books 2018 ............................................................................................................. 6
1.2.4 Internship Intake 2019 .......................................................................................................... 7
2 Legislation ..................................................................................................................................... 8
2.1 Acts ............................................................................................................................................ 8
2.1.1 The New Insolvency Act [Chapter 6:07] ................................................................................ 8
2.2 Statutory Instruments ............................................................................................................... 9
2.2.1 Expatriate Staff of World Vision Zimbabwe exempt from employment tax ........................ 9
2.2.2 World Vision Zimbabwe has been exempted from Income Tax ........................................... 9
2.2.3 Luggage Ware Manufacturers enjoy rebate on import duty on materials ......................... 10
3 Court Cases & Appeals ................................................................................................................ 11
3.1 Court Appeal ........................................................................................................................... 11
3.1.1 Landmark ruling for associations not for gain .................................................................... 11
3.2 Fiscal Appeal ............................................................................................................................. 14
4 Interpretations & Announcements ............................................................................................. 15
4.1 Tax Matrix Analysis of Existing and New Legislation .............................................................. 15
4.1.1 Taxpayers losing money in unclaimed medical expenses ................................................... 15
4.1.2 Tax status of a company limited by guarantee ................................................................... 16
4.1.3. VAT Implications on a sale in satisfaction of debt .......................................................... 18
4.2 Announcements ...................................................................................................................... 21
4.2.1 India exempts all taxes on sanitary pads ............................................................................ 21
4.2.2 SARS ditches drop boxes and certain printed forms .......................................................... 22
5 Disclaimer Clause ........................................................................................................................ 23
Page 2 of 23
1. Introduction 1.1 Executive Summary We are honored to present our June2018 Monthly Tax Update (MTU) which is designed to keep
businesses and individuals informed of the latest tax issues and bring value to both. Through our MTUs,
we analyze tax developments to ensure that our valued clients are kept in tune with changes in the tax
world. It is our sincere hope that MTUs will keep our clients updated with information that includes
changes in tax and other related laws, courts decisions, announcements and interpretations that bring
relevancy to the business environment.
Matrix Tax School (Pvt) Ltd
Tax Matrix (Pvt) Limited is pleased to announce the formation of its wholly owned subsidiary, Matrix
Tax School (Pvt) Limited to separately drive its training and publication vision as a fully- fledged training
centre in Zimbabwe for the business world, academia and professionals.
Tax and Business Interface Week dates
Our Second Edition of Tax and Business Interface Week will be running from the 15th -20th of October
2018 under the theme “Tax Policy for Economic Growth and Development 2019 and Beyond”. Broken
down into specific sectors of the economy, the event creates an opportunity for an in-depth analysis of
tax problems and opportunities of each sector by bringing together people sharing same background. The
event also allows participants to formulate inputs for presentation to the Ministry of Finance for inclusion
in the National Budget.
The New Insolvency Act [Chapter 6:07]
In a bid to improve the business environment and the economy in general, the government has introduced
the Insolvency Act which aims at maintaining economic growth, in particular the maintenance and
creation of jobs. The Act introduces the business rescue procedure into our legal framework, a process
that is targeted at assisting a dying business to resuscitate back to life and thereby maintain jobs, as
opposed to liquidation. An improvement in the business environment is beneficial to the nation because
it attracts both domestic and foreign investment into the economy. Business rescue procedure is one way
of improving our business environment
Expatriate Staff of World Vision Zimbabwe exempt from employment tax
World Vision is one of the largest humanitarian organisations in Zimbabwe. In recognition of this and
the work undertaken the organisation the government has seen it prudent to incentivise the expatriate staff
of Wold Vision by exempting them from income tax on their remuneration.
Landmark ruling for associations not for gain
A recent court decision in the High Court of Zimbabwe creates a landmark ruling for associations not for
gain and will see them being exempted from VAT on the basis that the income earned by them is as
consequences of donated services by its councilors or executive. The decision although sensible, opens
the flood gates to a myriad of associations not for gain that offer donated services to seek exemption from
VAT in terms of section 11(b) of the VAT Act.
Taxpayers losing money in unclaimed medical expenses
The Finance Act provides for medical expense, medical contribution, disability, elderly and blind credits.
Because of minimum knowledge, a lot of taxpayers are losing money by not claiming tax credits
especially medical expenses credits which apply to every employee. Credits are granted to individuals,
whether in employment or receiving trade and investment income. Medical expenses cover the taxpayer,
spouse and minor children of the taxpayer.
Tax status of a company limited by guarantee
A company limited by guarantee is a limited company that is different from the usual company entity in
that there is no share capital. The company’s members are guarantors rather than shareholders. Another
characteristic of this company is that it is not intended to generate profits for its members. Section 26 of
the Companies Act provides that, this type of company, in its memorandum, will prohibit the payment of
dividend to members. A company limited by guarantee can also be in the form of an association not for
gain. This type of company is tax favoured in terms of income tax and VAT.
VAT Implications on a sale in satisfaction of debt
Accounting for VAT in transactions where goods or services are exchanged for consideration in the
ordinary course of business does not pose a challenge. Value Added Tax raises many issues in respect of
goods sold in execution of debt because a sale of goods in execution is not exactly a supply in the ordinary
Page 3 of 23
meaning of the word, which is a supply in the course of trade. The legislature, however, saw it fit to deem
a sale in execution of debt as a supply for the purposes of Value Added Tax. In terms of section 7 of the
VAT Act, transactions which are not necessarily sales of voluntary disposal are brought within the scope
of the law by presuming that they are sales for the purposes of the VAT Act upon which VAT output tax
may be collected and sale in execution of debt falls amongst these.
Tax Amnesty gone and so what is next
Tax amnesty done and dust. The ZIMRA however is making frantic efforts to encourage taxpayers to be
compliant through different initiatives and this is still an ongoing process. The tax amnesty expired on
the 30th of June 2018 and now doors have been re-opened for voluntary disclosure from the 1st of July
2018 till the 31st of December 2018. Through voluntary disclosure, taxpayers are required to truthfully
and completely disclose income or items omitted from returns previously submitted or where there are
any tax obligations that the taxpayer may not have complied with.
Marvellous Tapera MD – Tax Matrix
Cell +263772349740
Page 4 of 23
1.2 Tax Matrix News and Developments 1.2.1 Matrix Tax School (Pvt) Limited
Page 5 of 23
1.2.2 Tax and Business Interface Week dates Our Second Edition of Tax and Business Interface Week will be running from the 15th -20th of October
2018 under the theme “Tax Policy for Economic Growth and Development 2019 and beyond”. Broken
down into specific sectors of the economy, the event creates an opportunity for an in-depth analysis of
tax problems and opportunities of each sector by bringing together people sharing same background. The
event also allows participants to formulate inputs for presentation to the Ministry of Finance for inclusion
in the National Budget.
Page 6 of 23
1.2.3 Taxation books 2018 Tax Matrix (Pvt) Limited is the leading publisher of taxation books in Zimbabwe. Our books help
professional students and business people alike solve tax problems without the need to consult tax experts
and if read can save companies from tax snares and they will be able ride in tax storms easily. And make
tax compliance easy. Please order a book today!!!.
Page 7 of 23
1.2.4 Internship Intake 2019
Page 8 of 23
2 Legislation
2.1 Acts
2.1.1 The New Insolvency Act [Chapter 6:07]
Background
In a bid to improve the business environment and the economy in general, the government has introduced
the Insolvency Act which aims at maintaining economic growth, in particular the maintenance and
creation of jobs. The Act introduces the business rescue procedure into our legal framework, a process
that is targeted at assisting a dying business to resuscitate back to life and thereby maintain jobs, as
opposed to liquidation. An improvement in the business environment is beneficial to the nation because
it attracts both domestic and foreign investment into the economy. Business rescue procedure is one way
of improving our business environment
Law and Interpretation
The Insolvency Act was assented to by the President and published on the 25th of June 2018 in the
extraordinary government gazette in terms of section 131 (6) of the Constitution of Zimbabwe. The Act
was enacted to provide for the administration of insolvent and assigned estates and the consolidation of
Insolvency Legislation in Zimbabwe; to repeal the Insolvency Act [Chapter 6:04] and to provide for
matters connected with or incidental to Insolvency. A major improvement from the previous Insolvency
Act is the introduction of the business rescue procedure which is captured in Part XXIII of the Insolvency
Act [Chapter 6:07].In terms of section 121 (1) (b) of the Act, corporate rescue means: “proceedings to
facilitate the rehabilitation of a company that is financially distressed by providing for the temporary supervision of
the company, and of the management of its affairs business and property; and a temporary moratorium on the rights
of claimants against the company or in respect of property in its possession; and the development and
implementation, if approved, of a plan to rescue the company by restructuring its affairs, business, property, debt
and other liabilities, and equity in a manner that maximizes the likelihood of the company continuing in existence
on a solvent basis or, if it is not possible for the company to so continue in existence, results in a better return for
the company’s creditors or shareholders than would result from the immediate liquidation of the company.”
Corporate rescue procedure is not available for every company and will not be granted for the mere asking
of it. A company must satisfy that it is in financial distress and that there is reasonable prospect of rescuing
the company before the commencement of corporate rescue proceedings. The company will commence
proceedings by way of company resolution which will be filed with the Master of High Court and the
Registrar of Companies. The company will then, within 5 days, by way of standard notice, notify every
affected person of the resolution and a sworn statement of the facts relevant to the grounds on which the
board resolution was founded and a notification of the appointment of a corporate rescue practitioner.
The previous legislation on insolvency did not allow contain this procedure.
Decision Impact
The introduction of the business rescue proceedings was long overdue in the Zimbabwean legal
framework. This procedure is adopted by most modern economies and is a sensible way of helping a
company that is in distress. It is more pre-emptive in approach than the judicial management process in
the Companies Act, which is usually implemented when the company is already in deep financial distress
or actual insolvency. With the business rescue process, resuscitation of business begins before the
company is actually insolvent. In terms of this new Act, the business rescue process begins when it
appears to be reasonably unlikely that a company will be able to pay its all of its debts as they become
due and payable within the immediately ensuing 6 months. We are of the view that this process is
beneficial to our economy as it allows an aversion of an impending insolvency and subsequent liquidation
thereby preserving jobs for the people.
Page 9 of 23
2.2 Statutory Instruments
2.2.1 Expatriate Staff of World Vision Zimbabwe exempt from employment tax
Background
World Vision is one of the largest humanitarian organisations in Zimbabwe. It began its operations in
Zimbabwe in 1973, with its objects primarily to assist children’s homes and offering aid to Zimbabweans
in camps and institutions. To date World Vision has been operating relief and developmental projects that
benefit millions of Zimbabweans across the country. With this view, the government has seen it prudent
to incentivise the expatriate staff of Wold Vision by exempting them from income tax on their salaries so
as to promote the deployment of expatriate staff with the expertise on developmental projects in tandem
with the bilateral agreement of economic and technical cooperation signed by Zimbabwe and the USA in
1982.
Law and Interpretation
The Minister of Finance and Economic Development in terms of paragraph 4(a) (iv)B of the Third
Schedule to Income Tax Act [Chapter 23:06] made notice by Statutory Instrument 127 of 2018 – Income
Tax (Exemption from Income Tax) (Expatriate Staff of World Vision Zimbabwe) Notice 2018 that with
effect from 1st February, 2019, expatriate staff of World Vision Zimbabwe were approved for the
purposes of subparagraph 4 (a) of the Third Schedule to the Income Tax Act [ Chapter 23:06], as being
exempt from income tax on salaries and emoluments in respect of their office. The exemption is to the
extent provided in terms of the Framework Agreement (Zimbabwe Economic and Technical Cooperation
Agreement) signed between Zimbabwe and the United States of America in 1982. The exemption will be
applicable only to projects and programmes undertaken by World Vision Zimbabwe and financed by the
Government of the United States of America.
Decision Impact
In order to promote development in the country, it is important to reengage the international community.
The decision to exempt from income tax the salaries and emoluments of expatriate staff of World Vision
is in line with the need to promote the ease of doing business with Zimbabwe. By allowing expatriate
staff to be exempt from income tax, it encourages more expatriate staff with technical expertise to be sent
to Zimbabwe and assist in economic development without the impediment of tax on their salaries which
in turn diminishes the amount of money to be spent on actual developmental projects. However, there
must be a balance between promotion of international engagement through tax incentive and caution not
to erode the tax base.
2.2.2 World Vision Zimbabwe has been exempted from Income Tax
Background
As indicated above, World Vision is one of the largest humanitarian organisations in Zimbabwe whose
operations benefit millions of Zimbabweans. In recognition of the works done by this organisation and
to give effect to an international instrument between Zimbabwe and USA, the government has exempted
World Vision from Tax on its income.
Law and Interpretation
The Minister of Finance and Economic Development has in terms of paragraph 3(g) (i) of the Third
Schedule to the Income Tax Act [ Chapter 23:06] made notice through Statutory Instrument 128 of 2018
that with effect from 1st February, 2009, the receipts and accruals of World Vision Zimbabwe are exempt
from income tax. The exemption is to the extent provided in terms of the Framework Agreement
[Zimbabwe Economic and Technical Cooperation Agreement] signed between Zimbabwe and the United
States of America in 1982.
Page 10 of 23
Decision Impact
Incentivising humanitarian organisations was long overdue. It is an important way of encouraging the
humanitarian efforts done by such organisations. It makes the operations of such organisations much
cheaper which in turn increases the beneficiaries of the organisation. It is our view that the move to
exempt World Vision, whilst it is a prudent one, must be a balanced with the need for prevention of
erosion of the tax base.
2.2.3 Luggage Ware Manufacturers enjoy rebate on import duty on materials
Background
For the industry to increase performance, government programmes such as duty rebates are a positive
step towards performance improvement that Zimbabwe desperately needs. Duty rebate on the raw
materials not available in Zimbabwe is a prudent way of improving the performance of our industries as
they can offer competitive prices on the goods they produce, and in turn push volumes and make
meaningful contribution to the fiscus.
Law and Interpretation
The Minister has in terms of section 235 as read with section 120 of the Customs and Excise Act [Chapter
23:02] made regulations that amend the second schedule of the Customs and Excise (Luggage Ware
Manufactures) (Rebate) Regulations, 2015, published in Statutory Instrument 149 of 2015 through
Statutory Instrument 131 of 2018 – Customs and Excise (Luggage Ware Manufacturers) (Rebate)
(Amendment) regulations, 2018 (No2). These regulations insert the following products (raw materials)
into the second schedule of SI 149 of 2015:
Tariff code Product description
3215.19.00 Screen printing inks
4410.90.00 Wooden boards
5807.10.00 Badges, woven labels
5903.90.00 Black PVC lining, taffeta, polyester fabric EVA backed, 1 inch Velcro male and
female, netting material, luggage panels, luggage straps, ABS sheets, polyboard
7307.99.00 Steel tubbing
7607.19.10 Aluminium foil
7608.10.00 Aluminium tubbing
8308.20.00 Rivets
8308.90.00 Screws, complete set of wheels, plastic buckles
The effect of these regulations is that all the material listed will be imported duty free.
Decision Impact
Incentivising of industries through rebates is one of the ways in which the government may promote the
performance of certain industrial sectors. We are of the view that the government intends to promote
industries through these rebates so that they can enhance their production through reduction in the cost
of production. This is calculated at preserving the viability of the industry and ensuring that jobs are
created and preserved which in turn ensures perpetual contribution to the fiscus by the industry.
Page 11 of 23
3 Court Cases & Appeals
3.1 Court Appeal
3.1.1 Landmark ruling for associations not for gain
Case Name Law Society of Zimbabwe v ZIMRA HH 409-18
Facts The Law Society of Zimbabwe (LSZ) is an association not for gain which charges
and collects subscriptions and practicing certificate fees approved by the Minister
of Justice and Parliamentary Affairs for the regulation of the legal profession.
The LSZ also charges fees to its members for the provision of professional
development programmes which are meant to maintain and improve the standard
of service by the legal profession to the public.
A dispute arose between the Law Society and ZIMRA regarding whether the Law
Society is exempt from value added tax in terms of section 11 (b) of the VAT Act
in respect of the subscriptions, practicing certificate fees and professional
development programmes fees that it charges to its members.
The LSZ then approached the High Court seeking a declaratory order to the effect
that the Law Society enjoys exemption in terms of section 11(b) of the VAT Act
in respect of the subscriptions, practicing certificates and professional
development programme fees it charges to its members.
Jurisdiction High Court
Issue for
determination Whether the LSZ is exempt from VAT in respect of subscriptions, practicing
certificates and professional development programme fees it charges its
members.
Date of
decision
11 July 2018
Decision
Impact The LSZ is an organisation not for gain and donates its services to its members.
Parties that are uncertain as to whether they are exempt on VAT can approach
the High Court for a declaratory order to clear the controversy with the taxman.
To avoid any controversy with the taxman, subscriptions must not be on a quid
pro quo for associations not for gain.
The decision is a sensible one because collection of VAT, penalties and interest
would render all law firms bankrupt because VAT was not collected on
subscriptions since the introduction of VAT in Zimbabwe.
Facts
The LSZ is an association not for gain which charges and collects subscriptions and practicing certificate
fees approved by the Minister of Justice and Parliamentary Affairs for the regulation of the legal
profession. It also charges fees to its members for the provision of professional development programmes
which are meant to maintain and improve the standard of service by the legal profession to the public
through the strengthening of skills at entry levels of the profession and to deepen expertise and refresh
knowledge among experienced practitioners. A dispute arose between the LSZ and ZIMRA concerning
whether the LSZ is exempt from Value Added Tax in terms of section 11 (b) of the VAT Act in respect
of the subscriptions, practicing certificate fees and professional development programmes fees that it
charges to its members. The LSZ then approached the High Court seeking a declaratory order to the effect
that the LSZ enjoys exemption in terms of section 11 (b) of the VAT Act and thereby settling the
controversy between the two parties.
Competing Arguments
Page 12 of 23
Issue Law Society of Zimbabwe
Whether the
Law Society of
Zimbabwe is
exempt from
VAT
obligations, in
respect of
subscriptions,
practicing
certificates and
professional
development
programme
fees it charges
its members.
That it is exempt for the VAT on the basis that: (i) It is an association formed and
operated not for gain.(ii) The subscriptions, Practicing Certificate fees and
Professional Development Programmes fees are services donated to it by the
councilors and experts and (iii) the entire services are donated.
That in respect of legal practitioners who require to earn credits, they commit
time researching and preparing papers for presentation and do not charge for such
service.
That giving such a legal practitioner credit is not a reward but recognition of the
fact that the process of preparing and presenting inevitably involves professional
development.
That the qualification that the donation must not give any benefit to the donor is
nowhere to be found in section in 11(b) of the VAT Act.
That all donations to the association appear to qualify under that section and there
is no basis on which a qualification can be written into the plain words, used by
the statute.
That the services in respect of which subscriptions and practicing certificates fees
are paid, are regulation and control of the profession by councilors.
That the councilors regulate and control the profession for the benefit of the
public and do not get paid.
That what the councilors do, is the service that it provides to its members and that
the councilors donate their services to it.
Issue The Commissioner General of ZIMRA
Whether the
Law Society of
Zimbabwe is
exempt from
VAT
obligations, in
respect of
subscriptions,
practicing
certificates and
professional
development
programme
fees it charges
its members.
That the LSZ offers services to its members in the form of Professional
Development Programme which services are paid for by the participants.
That the LSZ also collects annual subscriptions and charges fees for Practicing
Certificates.
That LSZ is a non-profit organisation does not mean that it is precluded from
charging VAT for the services it provides to its members.
That in circumstances where donation is made by an independent expert or senior
legal practitioner no longer requiring credit, the expertise and services are
donated as there is no payment or an expectation of payment.
That in circumstances where donated services are rendered by a legal practitioner
who still requires credit, then it is not a donation because the consideration
(reward) is the credit for the rendering of the service.
That the relationship between LSZ and a legal practitioner is not one of donor
and donee.
That applicant does not donate membership or a practising certificate without
payment and a legal practitioner makes a subscription and or pays a practicing
certificate fee as a quid pro quo of becoming a member of the LSZ and being
granted a practicing certificate for a particular year.
Court’s reasoning and Decision
Issue Court’s Reasoning and Decision
Whether the
Law Society of
Zimbabwe is
exempt from
That 3 three elements come out in s11 (b) of the VAT Act for an exempt supply
and these are: (i) It must be by a non-profit making association (ii) It must be by
a non-profit organisation (iii) The donation must have been to the association.
Page 13 of 23
VAT
obligations, in
respect of
subscriptions,
practicing
certificates and
professional
development
programme
fees it charges
its members.
That donated goods or services have been defined in the VAT Act as “goods and
services which are donated to an association not for gain and are intended for use
in the carrying on or carrying out of the purposes of that association.
That it is common cause that the LSZ is an association not for gain.
That the ZIMRA has previously granted the applicant exemption from Income
Tax under a section in the Third Schedule to the Income Tax Act.
That the Law Society supplies donated services in that the donors are the
councillors whether requiring credit or not.
That the donated services are the service offered by the experts through their
being resource persons in the professional development programmes.
That it is neither here nor there whether the donated services are rendered by a
senior practitioner, who does not require credit or by a legal practitioner who still
require credit.
That the services offered under the professional development programmes
qualify for an exemption in terms of s11 (b) of the VAT Act.
That the donated services are the services provided by councillors for the
regulation and control of the profession, and that it has not been contested by
ZIMRA.
That the ZIMRA was missing the point by focusing on whether the relationship
between the LSZ and its members is that of donor and donee.
That the councillors are the donors and the LSZ is the recipient.
That LSZ is distributing donated services in that the councillors deliberate and
consider every case submitted to the applicant and do not get paid for that.
That it is the above mentioned service which is exempt from VAT and not the
payments being made by the members of the LSZ.
That this fits very well in the definition of donated goods, that is, goods and
services which are donated to an association not for gain (as the Law Society of
Zimbabwe) and are intended for use in the carrying on or carrying out (regulation
or control of the profession by councillors) for the purposes of the association
(regulation and control of the profession).
That in view of the above, the LSZ enjoys an exemption from VAT obligations
in respect of subscription, practising certificate fees and professional
development programmes fee.
Courts Final
Decision That the Law Society enjoys an exemption in terms of section 11(b) of the VAT
Act from VAT obligations in respect of subscriptions, practicing certificates fees
and professional development fees it charges to its members
That the ZIMRA pays the cost of this application.
Decision Impact
The decision although sensible, opens the flood gates to a myriad of associations not for gain that offer
donated services to seek exemption from VAT in terms of section 11(b) of the VAT Act. Other institutions
that govern professionals have the same structure and a modus operandi that is similar to that of the Law
Society of Zimbabwe, therefore, by extension, this decision may be applicable to such institutions for as
long as the decision is not appealed against. Associations that wish to invoke the provisions of section
11(b) of the VAT Act must ensure that the facts and circumstances prevailing are similar to those in this
case. From a fiscal point of view, the ZIMRA would have lost millions in revenue per year if the
institutions of this nature, for those that have been paying, stopped paying VAT. Had the decision gone
otherwise it would effectively result in the dissolution of the Law Society of Zimbabwe because, VAT
was not being collected since the introduction of VAT in 2004. The Law Society of Zimbabwe would be
indebted to ZIMRA in a very large principal amount including penalties and interest. From a regional
perspective, the case has a persuasive force on our neighbouring jurisdictions and may influence the
application of the analogous provisions on exemptions.
Page 14 of 23
3.2 Fiscal Appeal
Nothing to report on
Page 15 of 23
4 Interpretations & Announcements
4.1 Tax Matrix Analysis of Existing and New Legislation
4.1.1 Taxpayers losing money in unclaimed medical expenses
Background
As an employee, the only tax issues that one usually takes into cogniscence are the taxes deducted on
one’s payslip. A lot of people complain about how their income reduce drastically from gross to net but
not knowing that they are forgoing tax credits that they can take advantage of in order to boost their net
income. A tax credit is an amount of money that taxpayers can subtract from taxes owed to the
government. The value of a tax credit depends on the nature of the credit. The Finance Act provides for
medical expense, medical contribution, disability, elderly and blind credits. Because of minimum
knowledge, a lot of taxpayers are losing money by not claiming tax credits especially medical expenses
credits which apply to every employee. Credits are granted to individuals, whether in employment or
receiving trade and investment income. Medical expenses cover the taxpayer, spouse and minor children
of the taxpayer. Ann Plato said that: “to remove ignorance is an important branch of benevolence”. This article
is targeted at empowering our readers with knowledge and thereby allowing them to save by closing
down this avenue in which they lose money.
Law and Interpretation
An individual, whether employed or receiving trade and investment income is entitled to a tax credit in
respect of all medical expenses incurred. This is captured by s12 of the Finance Act [Chapter 23:04].
Medical expenses are defined in subsection 1 of the Act as follows:“ “medical expenses” means— (a) the
sum of any payments made for the purchase, hire, repair, modification or maintenance of any invalid appliance or
fitting which the Commissioner is satisfied is necessary for use by a taxpayer or his spouse or any child or the
taxpayer as a consequence of any mental or physical defect or disability; and (b) the sum of any payments made
for— (i) services rendered to a taxpayer, his spouse and minor children or one or more of them by a medical or
dental practitioner; and (ii) drugs and medicines supplied to a taxpayer, his spouse and minor children or one or
more of them on the prescription of a medical or dental practitioner; and (iii) the accommodation, maintenance,
nursing and treatment, including blood transfusions and X-ray and laboratory examinations, tests and the like, of a
taxpayer, his spouse and minor children or one or more of them in or at a hospital, maternity-home, nursing-home,
sanatorium, surgery, clinic or similar institution; and (iv) the conveyance by ambulance, including an air ambulance,
of a taxpayer, his spouse and minor children or one or more of them; and (c) the amount of any contributions paid
to a medical aid society in respect of the taxpayer or his spouse or any minor children.” Medical expenses incurred
by a taxpayer are deductible on the income of such taxpayer at the rate of one dollar for every two dollars
paid (50% of cost incurred). In respect of the cost of ambulance transport, a taxpayer must show that he
used an actual ambulance and not a vehicle that was conveniently used as an ambulance for that specific
time. The court has defined an ambulance in the case of JF Campbell v Commissioner of Taxes J 189, as
“a vehicle or conveyance for the transport of the sick to a place of treatment.” In light of the above given
definition of medical expenses, it is clear that most taxpayers incur these medical expenses.
A person must be ordinarily resident in Zimbabwe to claim
Notwithstanding the fact that the definition is wide enough to capture every taxpayer, the Act further
qualifies who amongst the taxpayers will benefit from the provision. Subsection 4 of section 12 of the
Finance Act, provides that: “No credit shall be deducted in terms of subsection (2) in respect of any payment
such as is referred to in paragraph (a) or (b) of the definition of “medical expenses” in subsection (1) if the taxpayer
is not at any time during the period of assessment ordinarily resident in Zimbabwe”. The provision is clear that
for a taxpayer to claim deduction of medical expenses on income tax due and payable, the taxpayer must
have been ordinarily resident in Zimbabwe during the period of assessment. The Act however does not
provide the definition of “ordinarily resident” but fortunately there is the common law interpretation
derived from previously decided cases. In the case of Cohen v CIR 13 SATC 362 the court in defining
ordinary residence held that: “a person’s ordinary residence was the country to which he would naturally and as
a matter of course return from his wanderings…” The case of Levene v IRC 1928 AC also provides a common
law principle on what constitutes ordinary residence. In this case it was held that: “if it is part of a person’s
Page 16 of 23
ordinary regular course of life to live in particular place with a degree of permanence, the person must be regarded
as being ordinarily resident.” In Soldier v COT 1943 SR the court in pronouncing ordinary residence held
that: “the place of residence must be settled and certain, not temporary and casual” Another common law
principle used in the determination of ordinary residence is derived from the case of H v COT 1960 SR
wherein it was held that: “ a person is ordinarily resident where his permanent place of abode is situated , where
his belongings are stored which he left behind during temporary absences and to which he regularly returns after
these absences.” Furthermore, for tax purposes, the term “ordinarily resident” is narrower than the term
“resident” as propounded in the case of CIR v Kuttel 1992 AR. The court held that: “a person is ordinarily
resident where he normally resides, apart from temporary and occasional absences.”
A deceased’s estate also benefits
The provisions in respect of deductibility of medical expenses extend to a deceased’s estate. Subsection
5, paragraph (a) of section 12 of the Finance Act provides that: “For the purposes of this section—(a) a
payment made from the deceased estate of a taxpayer by way of medical expenses which are incurred before the
death of the deceased shall be treated as having been made immediately before the death of the deceased” This
entails that when administering the estate of a deceased, tax credit in respect of medical expenses incurred
before the death of the deceased shall be allocated to the period of fiscus immediately before the death of
the deceased.
A taxpayer must not be refunded for medical expenses incurred.
Furthermore, for a deduction on medical expenses to be allowed, the taxpayer must not be receiving a
refund or payment whatsoever in respect of the medical expenses he would have incurred either in respect
of himself, spouse or his children. This legal position is captured in paragraph (b) of subsection 5 of
section 12 of the Finance Act.
Evidence must be provided for incentive to be allowed
For taxpayers to benefit from this tax credit, they must submit sufficient evidence to the Human Resources
department which is usually tasked with the responsibility of calculating and remitting the correct PAYE
to ZIMRA. In practice the ZIMRA requires the evidence of expenses claimed to be in their original form.
The original invoices issued for a medical expense incurred must be submitted to the Human Resources
department. It is a punishable offence in terms of the law to falsely claim medical expenses. False claims
of medical expenses will result in the claim being disqualified and will attract penalties and in some
instances prosecution for criminal charges.
Decision Impact
Whilst tax incentives are a good way of incentivising the taxpayers, the level of tax awareness in the
country is very low which is evident in the non-utilisation of tax credits for medical expenses that are
available at law. At Tax Matrix, it is our goal to not only offer practical tax solutions but to also educate
the people on tax.
4.1.2 Tax status of a company limited by guarantee
Background
A company limited by guarantee is a limited company that is different from the usual company entity in
that there is no share capital. The company’s members are guarantors rather than shareholders. Another
characteristic of this company is that it is not intended to generate profits for its members. Section 26 of
the Companies Act provides that, this type of company, in its memorandum, will prohibit the payment of
dividend to members. A company limited by guarantee can also be in the form of an association not for
gain. It is usually created for a charitable purpose but not all companies limited by guarantee are charitable
in nature. Section 26 provides that: “(1) Where the Minister is satisfied that an association exists for any lawful
purpose, the pursuit of which is calculated to be in the interests of the public, or any section of the public, and
intends to apply its profits, if any, or other income in promoting its objects, and to prohibit the payment of any
dividend to its members, and that it is desirable that such association should be incorporated, the Minister may, if
the association submits to him a memorandum complying with section eight, by licence under his hand direct that
the association be registered as a company without the addition of the word “Limited” to its name, and the
association may thereupon be registered accordingly.”
Law and Interpretation
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Income tax - receipts and accruals of company
A company limited by guarantee enjoys certain tax benefits in comparison to the ordinary private limited
company. If its objects are not to generate profits for its members, it enjoys the benefit of not being taxed
on its income. Section 14 as read with the 3rd Schedule of the Income Tax Act provides for exempt
income. The 3rd Schedule of the Income Tax Act paragraph 2 subparagraphs (d) and (e) provides that:
“The receipts and accruals of— …(d) clubs, societies, institutes and associations organized and operated solely for
social welfare, civic improvement, pleasure, recreation or the advancement or control of any profession or trade or
other similar purposes if such receipts or accruals, whether current or accumulated, may not be divided amongst or
credited to or inure to the benefit of any member or shareholder other than by way of remuneration for services
rendered; (e) ecclesiastical institutions , charitable and educational institutions of a public character—(i) consisting
of donations, tithes, offerings or other contributions by the members or benefactors of the institutions concerned,
and any other receipts or accruals that are not receipts and accruals of income from trade or investment carried on
by or on behalf of the institutions concerned; or (ii) that are receipts and accruals of income from trade or
investment by any company of which that institution is the sole or principal member, and in respect of which the
Minister responsible for the Companies Act [Chapter 24:03] has issued a licence in terms of section 26 of that Act.
A company limited by guarantee may take the personality of any of the above mentioned corporate
persona. For as long as it maintains its objects and does not declare dividend to the shareholders or
guarantors, this type of company will remain exempted on tax on its income. However, if the company
declares dividend or conducts itself in a manner that is tantamount to declaring a dividend for its members,
then the taxman will treat it as a private limited company and will not exempt it from tax.
VAT - receipts and accruals of company
In as far as VAT is concerned, a company registered by guarantee that takes the persona of an association
not for gain, will benefit on VAT exemption in terms of section 11(b) of VAT Act which provides that:
“The supply of any of the following goods or services shall be exempt from the tax imposed in terms of paragraph
(a) of subsection (1) of section six—(b) the supply by any association not for gain of any donated goods or services
or any other goods made or manufactured by such association if at least 80% of the value of the materials used in
making or manufacturing such other goods consists of donated goods” The confusion in the interpretation of
section 11(b) of the VAT Act has resulted in the argument being taken to court in the recent case of Law
Society v ZIMRA. The main confusion that most people are drawn to is whether the relationship between
the members of an association and the association itself is that of a donor and donee. This is misleading
as pointed out in the Law Society v ZIMRA case. The point to be taken into account is whether the
association is supplying donated services or goods. The Act is clear that an association not for pecuniary
gain will enjoy a tax benefit in respect of goods donated to it for passing on to beneficiaries. For example,
a church that receives clothing or food from a donor will not be taxed when it further transfers ownership
of that clothing or food to the beneficiaries or the congregants.
Withholding tax on contracts
In as far as withholding tax on local contracts is concerned; a company limited by guarantee is expected
to withhold taxes on supplies received from a person not in possession of a tax clearance certificate (ITF
263). In terms of section 80 (2) of the Income Tax Act, …unless a payee furnishes the paying officer with a
tax clearance certificate, the paying officer shall withhold 10% of each amount payable to the payee under the
contract concerned, and shall remit each amount so withheld to the Commissioner on or before the 10th day of the
month following that in which the payment was made.”
Salaries of employees of company limited by guarantee
It must be noted that the salaries and wages of employees of exempt organisations are subject to tax. This
is the legal position despite the fact that those salaries and wages are paid from the exempt income made
by the exempt organisation. When an exempt organisation has employees, it must register as an employer
and deduct P.A.Y.E on remuneration, stipend or any benefit paid to the employee. The tax benefit in this
respect does not extend to the employees’ income.
Decision Impact
A company limited by guarantee is an ingenious way of limiting taxes in order to achieve great
objectives such as charity, humanitarian efforts, and regulation of professionals for the benefit of the
public. Limitation of taxes ensures the ease of achieving such benevolent objectives. The tax benefits
of establishing a company limited by guarantee have been fully exposed and taxpayers who wish to
establish companies with the objective of not making profit can enjoy tax exemptions which in turn
promote the objectives of the company limited by guarantee.
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4.1.3. VAT Implications on a sale in satisfaction of debt
Background
Accounting for VAT in transactions where goods or services are exchanged for consideration in the
ordinary course of business does not pose a challenge. Value Added Tax raises many issues in respect of
goods sold in execution of debt because a sale of goods in execution is not exactly a supply in the ordinary
meaning of the word, which is a supply in the course of trade. The legislature, however, saw it fit to deem
a sale in execution of debt as a supply for the purposes of Value Added Tax. In terms of section 7 of the
VAT Act, transactions which are not necessarily sales of voluntary disposal are brought within the scope
of the law by presuming that they are sales for the purposes of the VAT Act upon which VAT output tax
may be collected and sale in execution of debt falls amongst these.
Law and Interpretation
Section 7(1) of the VAT Act [Chapter 23:12] provides that: “(1) For the purposes of this Act, where—
(a) goods acquired, manufactured, assembled, constructed or produced by a person are sold, under a power
exercisable by another person, in or towards satisfaction of a debt owed by the person whose goods are sold; and
(b) the person whose goods are sold has not furnished, to the person exercising the power of sale, a statement in
writing that the supply of those goods would not be a taxable supply if those goods were sold by the person whose
goods are sold, and stating fully the reasons why that supply would not be a taxable supply; those goods shall be
deemed to be supplied in the course of a trade”.
The above mentioned provision treats an involuntary sale or a sale in execution of debt as sale which
gives rise to VAT despite it not being a sale in the ordinary course of business. The deputy sheriff or the
messenger of court who sales goods of a debtor in execution of a court order or a power exercisable by
another person in satisfaction of a debt is deemed to have made a supply in the course or furtherance of
trade. The law deems such a transaction a “deemed supply”. The term “deemed” is explained in the case
of Chotabhai v Union Government (Minister of Justice) and Registrar of Asiatics 1911 AD 13 as
follows:“The use of the word “deemed” was perhaps not a happy one, because that term may be employed to
denote merely that the person or things to which it relates are to be considered to be what they really are not, without
in any way curtailing the operation of a Statute in respect of other persons or things falling within the ordinary
meaning of the language used. If the word were so employed, the result would be artificially to extend the scope of
the expression referred to, without attempting to define it”. The case of CSARS v Marshall NO (816/2015)
[2016] ZASCA 158 further explained that: “the word ‘deemed’ is primarily appropriate when it is intended to
imbue a person or thing with features or qualities he or it does not, in reality, have and is not appropriate when the
person or thing actually has those features”.
The seller of the goods should charge VAT irrespective of the fact that he is a registered operator or not,
unless such person has received a notification in writing from the debtor (owner of the goods) specifying
that the supply of those goods would not be a taxable supply if those goods were sold by the debtor. The
debtor is mandated to state the reasons in full why the supply would not be taxable supply. VAT
accounted in a sale in execution of debt in terms of section 7(1) of the VAT Act must be declared in a
special return in terms of section 29 of the VAT Act. Section 29 of the VAT Act provides that:
“Where goods are deemed by subsection (1) of section seven to be supplied in the course of a trade the person
selling the goods, hereinafter referred to as “the seller”, whether or not the seller is a registered operator, shall,
within the period of 30 days after the date on which the sale was made— (a) furnish the Commissioner with a return in the prescribed form reflecting— (i) the name and address of the seller and, if registered as a registered operator, his registration number; and (ii) the name and address of the person whose goods are sold, hereinafter referred to as “the owner”, and, if the
owner is registered under this Act, the registration number of the owner; and (iii) the date of the sale; and (iv) the description and quantity of the goods sold; and (v) the selling price of the goods and the amount of tax charged in respect of the supply of goods under the sale,
being the tax leviable in respect of such supply in terms of paragraph (a) of subsection (1) of section six; and (vi) such other particulars as may be required; and (b) pay to the Commissioner the amount of tax so charged; and (c) send or deliver to the owner a copy of the return referred to in paragraph (a),
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and the seller and the owner shall exclude from any return which the seller or owner is required to furnish under
section twenty-eight the tax charged on the supply of goods under the sale in respect of which the return is furnished
under this section.”
As more fully appears in the above mentioned provision, the return must be submitted to ZIMRA within
the period of 30 days after the date on which the sale was made. The seller must also deliver a copy of
the return to the owner (debtor) of the goods within 30 days of the date of sale. Any tax due should be
remitted within the same timeframe and shall be computed at 15% of the value of supply.
Decision Impact
Taxpayers must be cautious of deemed supplies in order to avert penalties because naturally these are not
supplies within the ordinary meaning of a supply. The law artificially makes such transactions a taxable
supply. This poses a difficulty in the determination of whether VAT would apply in respect of transactions
of this nature. Every seller, whether registered VAT operator or not, must be on the lookout for these sort
of transactions and ensure that they collect VAT due on such transactions as provided for at law in order
to avoid tax snares.
4.1.4. Tax Amnesty gone and so what is next
Background
Tax amnesty gone and dust. The ZIMRA however is making frantic efforts to encourage taxpayers to be
compliant through different initiatives and this is still an ongoing process. The tax amnesty expired on
the 30th of June 2018 and now doors have been re-opened for voluntary disclosure from the 1st of July
2018 till the 31st of December 2018. Through voluntary disclosure, taxpayers are required to truthfully
and completely disclose income or items omitted from returns previously submitted or where there are
any tax obligations that the taxpayer may not have complied with. The voluntary disclosure should be
received before the commencement of an investigation or audit on the taxpayer, or before the Zimra
notifies the taxpayer of the commencement of a tax audit or investigation. The returns should be for the
period 30 June 2018 going back to any such period the income was omitted. The program is open to all
taxpayers; individuals, companies, associations, partners, partnerships, trusts, sole proprietors, etc.
Law and Interpretation
The voluntary disclosure programme is open to all the taxpayers who have at times committed punishable
offences against the Commissioner such as those highlighted in s81 of the Income Tax Act which reads: “(1) Any person who, without just cause being shown by him—
(a) fails or neglects to furnish, file or submit any return or document….
(b) refuses or neglects to furnish any information or reply, or to attend and give evidence as and when
(c) fails to show in any return made by him any portion of the gross income received by or accrued to or in favour
of himself…………..
(d) fails to show in any return prepared or rendered by him on behalf of any other person any portion of the gross
income received by or accrued to or in favour of such other person………………
(e) fails, refuses or neglects to show in any return made by him or her information required to; shall be guilty of an
offence and liable to a fine not exceeding level seven or to imprisonment for a period not exceeding three months
or to both such fine and such imprisonment”.
When one makes a voluntary disclosure, the information and documents provided should be true and
correct. Section 44 (11) of the Income Tax Act emphasizes this as follows: “Production of documents and evidence on oath The Commissioner is hereby empowered to administer oaths to persons examined in terms of this section. Any
person who, after having been duly sworn, willfully makes a false statement to the Commissioner on any matter
relevant to the inquiry, knowing such statement to be false or not knowing or believing it to be true, shall be guilty
of an offence and liable to a fine not exceeding level seven or to imprisonment for a period not exceeding two years
or to both such fine and such imprisonment”. The provision is very clear that the ramifications of presenting information that is not truthful on oath are
too hard to swallow. The taxpayer must disclose information truthfully and accurately during voluntary
disclosure.
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Section 46 of Income Tax Act highlights the additional tax in event of default or omission as follows: (1) A taxpayer shall be required to pay, in addition to the tax chargeable in respect of his taxable income— (a) if he makes default in rendering a return in respect of any year of assessment— (b) if he omits from his return any amount which ought to have been included therein, (c) if he makes any incorrect statement in any return rendered by him (d) if he fails to disclose in any return made by him any facts which should be disclosed
Instead of paying the additional tax as stipulated by the Law, making a voluntary disclosure will lighten
the tax burden. Taxpayers must take advantage of voluntary disclosure and enjoy the remission of
penalties. This is the most sensible way to proceed for taxpayers who have missed Amnesty.
Decision Impact
Voluntary disclosure gives taxpayers a second opportunity to clean up their tax affairs with a possibility
of full penalty waiver. Disclosure is required of different business flaws pertaining to registration,
submission of returns, payments, maintaining records and information, fiscalisation of operations, among
others. Any person who failed to declare goods and or services for duty purposes can also make a
voluntary disclosure. Where the taxpayer is in doubt of the way they are treating transactions for tax
purposes and require an opinion from ZIMRA they can voluntarily disclose such transactions. Once you
make a voluntary disclosure, this will not trigger an audit, investigation or prosecution. The voluntary
disclosure programme also waivers penalties, civil penalties, fines and additional tax in full but the
interest on outstanding debts remains due and payable. The outstanding tax debts will be paid on agreed
payment terms and businesses will be free from the burden of non-compliance. Making a voluntary
disclosure also enables taxpayers to access tax clearances leading to ease of doing business. We observe
that government through ZIMRA realizes that the need to give businesses an opportunity to straighten
out their tax affairs and retain business viability which translates to perpetual contribution to the fiscus.
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4.2 Announcements
4.2.1 India exempts all taxes on sanitary pads
Background
The teenage age of females is a difficult period that is characterised by radical body development that
includes the beginning of menstruation. For females this age, menstruation is a shocking experience to
an extent that when they are on their menstrual period, others fail to attend school. India introduced a
goods and services tax in which all goods and services save for a few exempt goods would attract tax at
a rate of 12%. This sparked an outcry amongst the people and resulted in the reverse of the decision.
India: huge relief for girls as officials scrap tax on sanitary pads
India on Saturday 21 July 2018 scrapped a controversial tax on sanitary pads, a move hailed by
campaigners who say it will help more girls to go to school during their periods and boost their job
prospects. “I think that all mothers and sisters will be very happy to hear that sanitary pads are now 100
percent exempt from tax and have been made tax-free. And now sanitary pads will not fall under any
category of Good and Services Tax”, said Indian’s interim Finance Minister, Piyush Goyal.
Activists say removing the tax on pads tackles one of the biggest barriers to education for girls, who are
often forced to stay at home due to a lack of access to clean hygiene products, while also facing stigma
and a lack of toilets in schools. I think that all mothers and sisters will be very happy to hear that sanitary
pads are now 100 percent exempt from tax and have been made tax-free. And now sanitary pads will not
fall under any category of Good and Services Tax. Periods are among the leading factors for girls to drop
out of school in a country where four out of five women and girls are estimated by campaigners to have
no access to sanitary pads. Sanitary pads were taxed at 12 percent under India’s Goods and Services Tax
launched in July 2017. The decision triggered protests, petitions and court cases that questioned why the
government taxed pads as a luxury rather than an essential item, such as condoms, which are tax-free.
Decision Impact
This is a big win for the Indian girls and Zimbabwe could possibly pick a leaf from India Kenya, Ireland
and Canada whose sanitary pads are tax free.Several calls have been made to the government to rebate
sanitary ware and raw materials used to manufacture sanitary ware. Recently, scores of girls and young
women embarked on a campaign dubbed “Happy flow campaign” advocating for health and wellness and
in particular the access to sanitary pads. In order to promote the girl child, it is provident for the
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government to follow the route followed by India which is in line with women empowerment for the
purposes of redressing the imbalances of the past. It has been noted that young girls sometimes miss
school during their menstrual cycle which takes them aback in the progression of their studies. Cheaper
sanitary ware would be a sensible way of giving effect to the constitutional mandate of redressing the
injustices of the past through the promotion of the girl child by provision of sanitary ware.
4.2.2 SARS ditches drop boxes and certain printed forms
PRETORIA, 29 June 2018 – The South African Revenue Service (SARS) will remove drop boxes for the
submission of income tax returns and other paper documents, in its drive to encourage taxpayers to use
e-Filing for all tax transactions where possible. As of 01 July 2018, it will also no longer provide certain
printed forms at its branches, including forms used to register as a taxpayer (IT77C for companies and
IT77TR for trusts), as a VAT vendor (VAT101), as an employer (EMP101), as well as forms used to
apply for tax directives (IRP3(a), (b), (c) and (d)).
These transactions, together with the filing of income tax returns, payments and the uploading of
supporting documents, can all be done electronically on eFiling with the support of Help-You-eFile and
the contact centre if taxpayers get stuck. SARS has increased the size threshold of files from 2 megabytes
to 5 megabytes in time for tax season. The increase in digital transactions means a significant saving on
paper, printing and courier costs for both SARS and the taxpayer. This will also reduce traffic in branches
– one of SARS’ objectives for Tax Season 2018.
A digital and paperless approach was initiated more than a decade ago when the internet-based eFiling
system was made available for the electronic submission of personal income tax returns. Drop boxes
were, however, provided in addition to the branch and electronic channels for taxpayers who chose to
submit their returns and documents manually. SARS will ensure that taxpayers switching to eFiling are
supported. Taxpayers will still be able to visit a SARS branch if they need an assisted filing experience.
However, they are encouraged to migrate to electronic submission. Original paper documents will be
handed back to the taxpayer for safekeeping.
SARS encourages taxpayers to use eFiling (www.sarsefiling.co.za), which is the most convenient method
for the majority of transactions with SARS, and is available 24 hours. There are also email addresses
available on the SARS website for taxpayers to interact with SARS, as well as the SARS Contact Centre
(0800 00 7277).
Source: http://www.sars.gov.za/Media/MediaReleases/Pages/29-June-2018---SARS-ditches-drop-
boxes-and-certain-printed-forms.aspx
Decision Impact
E – filing is in line with digitalization and embraces technology in the operations of revenue authorities.
It saves time and there is an assurance of receipt of returns as opposed with the manual filing of returns
which sometimes get lost. The success of efiling is largely dependent on the efficient efiling system that
is in place. The complexity of efiling arises when a taxpayer wants to upload complex returns with a lot
of attachments to be uploaded. Most systems are not capable of handling a lot of data in that respect.
Therefore, in as much as the move by SARS is positive, it is not flawless and without its problems.
However, they will learn as they proceed. Zimbabwe already has an efiling system in place, but to drop
manual submission of returns would be too drastic a route for the ZIMRA to follow because the current
system has many flaws and needs improvement before a final ban on manual submissions.
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5 Disclaimer Clause
The information contained in this MTU is for general guidance only and is not intended as a substitute for specific
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of the information and opinions contained in this publication, no liability is accepted for the consequences of any
inaccuracies contained in this guide. The information does not constitute a legal advice nor can it be relied on in
any dispute with the tax authorities and shall not constitute any legal or tax opinion in this or any jurisdiction. The analysis contained in this MTU is based on the current legal framework which is subject to change and Tax
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