Fifty percent forex corporate tax payment in Zim$ requirement still in force
TREASURY has reiterated that it will not accept forex payment for the 50 percent local currency tax component, which will be converted at the Wholesale Auction Exchange Rate in order to curb tax arbitrage.
To ensure compliance with the latest regulations, statutory penalties for late payment of taxes due will be vigorously applied, the Treasury secretary, Mr George Guvamatanga, has said.
Professor Mthuli Ncube
Finance and Economic Development Minister, Prof Mthuli Ncube, last week directed that as part of efforts to further promote the use of the currency, for the June 2023 Quarterly Payment Date (QPD), taxpayers are required to settle 50 percent of the foreign currency portion of their corporate tax obligations in local currency.
In correspondence to the Zimbabwe Revenue Authority Commissioner General, Ms Regina Chinamasa on Monday, Mr Guvamatanga said the 50 percent tax obligation payable in local currency will be converted at the Wholesale Auction Exchange Rate prevailing on the date when the tax fell due.
“As you are aware, the Government on 23 June 2023 issued a Press Statement announcing that for the June 2023 Quarterly Payment Date (QPD), taxpayers will be required to settle 50 percent of the foreign currency portion of their corporate tax obligations in local currency to promote the use of the Zimbabwe dollar in the economy,” he said.
“Furthermore, it was advised that, where the law requires the tax liability to be paid in local currency, taxpayers are compelled to settle such tax obligations exclusively in local currency and therefore, Government will not accept any payments in USD or any other foreign currency for the portion of corporate income tax due in local currency for the June QPD.
“It should be noted that the usual statutory penalties for late payment of taxes due will be vigorously applied. However, to avoid any tax arbitrage by taxpayers, the 50 percent tax obligation payable in local currency will be converted at the Wholesale Auction Exchange Rate prevailing on the date when the tax fell due.”
Government has urged taxpayers without adequate Zimbabwe dollars to meet the local currency tax obligation to urgently approach the Reserve Bank of Zimbabwe through their banks to facilitate disposal of their USD holdings in order to access the requisite Zimbabwe dollars.
Reserve Bank of Zimbabwe (RBZ)
The ministry also warned corporates bent on engaging in illegal parallel markets that they will face sanctions from the Financial Intelligence Unit. Following the implementation of various policy measures to stabilise the economy, the Treasury says there has been notable stability in the movement of the exchange rate and general prices of goods and services in the economy. To that end, the Government is committed to continuing the currency reforms that have enabled the economy to be competitive and will continue to fine-tune the foreign currency markets in order to achieve lasting price stability.
The central bank has indicated that it will stay the course of a tight monetary policy stance to restore and maintain macro-economic stability. This comes as it has been rolling out policy pronouncements, which include liberalisation of the foreign currency, to arrest exchange rate volatility and price increases.-chronicle
