Zimra directs businesses to levy new VAT rates

THE Zimbabwe Revenue Authority (Zimra) has directed businesses to configure their fiscal devices to capture the new value-added tax rate of 15 percent, which came into effect on January 1.

ZIMRA

The tax was slightly adjusted from 14,5 percent. In a public notice, the tax collector said all registered operators should effect the new changes.

“Following the promulgation of Finance Act number 2 of 2022, the Finance Minister (Professor Mthuli Ncube) directed that the Value Added Tax rate be adjusted from 14,5 percent to 15 percent with effect from 1 January 2023,” reads part of the statement.

“Fiscal devices should record VAT at 15 percent, therefore VAT registered operators are required to approach their respective approved suppliers for effecting this change and ensuring that their fiscal devices are correctly configured to record the new value-added tax rate of 15 percent.”

According to the budget statement, Finance and Economic Development Minister, Prof Ncube said regionally, the country’s VAT rates of 14,5 percent are comparatively lower than the SADC regional standard VAT rate, which averages 16 percent.

The VAT rate was reduced from 15 percent with effect from January 1, 2020, in order to support households during the peak period of the Covid-19 pandemic.

“I, therefore, propose to reinstate the VAT rate to the previous rate of 15 percent, with effect from 1 January 2023,” said Prof Ncube in his budget statement, adding that the impact on low-income households will be mitigated by existing exemptions and zero-rating on basic goods and services.

Economists said the increase in value-added tax by 0,5 percent will have a marginal increase in some commodities where VAT is levied but this is going to be marginal.-ebusinessweekly