Amendment to Section 80A to boost fiscal contributions from professionals

TAX experts have hailed the recent amendment to Section 80A of the Income Tax Act (Chapter 23:06), saying it will enhance professionalism and ensure equitable contributions to the national fiscus.

The amendment to Section 80A is a bold step by the Government to harness revenue from high-income earners while reinforcing professionalism and accountability.

The amendment, outlined in Notice 92 of 2024 by the Zimbabwe Revenue Authority (Zimra), mandates individuals practicing designated trades to present a valid tax clearance certificate when applying for or renewing their professional licences. African safaris

The certificates must be dated no earlier than 30 days before submission.

Professionals affected include architects, engineers, technicians, land surveyors, legal practitioners, auditors, accountants, chartered accountants, health practitioners, veterinary surgeons, real estate agents, and quantity surveyors.

“Zimra encourages all professionals in these fields to ensure compliance with this new requirement to avoid any disruptions in their practice,” said the tax authority.

Tax consultant Mr Peter Mgodi lauded the amendment, describing it as both economically and legally prudent. He noted that it would ensure all professionals contribute fairly to national revenue.

“These are high-paying professions where everyone is expected to be able to earn income with taxable thresholds. Therefore, their contribution to the fiscus needs to be noticed and monitored by the revenue authority whose appetite for revenue is continuously growing, despite a drying economy,” he said.

Mr Mgodi said the policy levels the playing field by ensuring that only those fulfilling their tax obligations can continue practising.

He said it also compels unregistered practitioners to join professional bodies, fostering transparency and ethical conduct.

“It further allows only those who are contributing to the fiscus to be able to practice, which is a fair position. It further forces the unregistered to register and therefore be under a controlling professional body for transparency and good conduct,” he said.

Mr Mgodi highlighted the broader economic benefits of the amendment, noting that it promotes regulated economic activity and boosts fiscal inflows in a climate where informal business practices are on the rise.

Another tax expert, Mr Edmund Mwandurah, emphasised the potential for the policy to significantly increase Treasury revenue.

He said if all professionals comply, those registered with their professional bodies will also be registered with Zimra, thereby contributing to tax revenue.

“The challenge for Zimra will be to ensure stringent monitoring and enforcement so that all income earned by these professionals is declared, and the appropriate taxes are paid,” said Mr Mwandurah.

He added that many professionals would likely prioritise compliance to safeguard their reputations, making the policy a win for both the fiscus and professional accountability.

“Many professionals would not want to risk their reputation by being caught on the wrong side of the law,” he said.

Mr Mwandurah said the success of the policy will largely depend on Zimra’s ability to enforce compliance effectively. —-chroncile