Zimbabwe: Tax measures in Finance Act 2021

Budget proposals were subsequently promulgated and include significant tax measures

Budget proposals were subsequently promulgated and include significant tax measures

The Minister of Finance and Economy Development announced the budget for 2022 on 25 November 2021. Read TaxNewsFlash

The budget proposals were subsequently promulgated on 31 December 2021 with publication in the official gazette of Finance Act (No. 7) of 2021. A notice from the tax authority, issued in January 2022, also highlights certain amendments that were effective 1 January 2022.

The budget included the following measures that were ultimately included in the Finance Act:

Mining royalties

  • Ability to deduct mining royalties expanded to include financial institutions
  • Changes to the calculation of the royalty for PNG metals, gold, and diamonds 


Value added tax (VAT)

  • A revised definition of “tax invoice” or “fiscal tax invoice” regarding a tax invoice produced by a registered operator and printed by a fiscalised electronic register or fiscal memory device used by a registered operator
  • A rule that tax invoices generated before 31 December 2021 may be claimed no later than 31 March 2022
  • Tax clearance certificates not to be issued to non-compliant taxpayers
  • Increased threshold amounts for mandatory VAT registration


Customs duty

  • Introduction of 5% levy on the value of imported dairy products
  • 20% of the net premiums collected on motor vehicle insurance for foreign-registered vehicles to be used for assisting road accident victims
  • Pre-owned motor vehicles no longer eligible to be placed in bonded warehouses
  • For pre-owned motor vehicles currently held in bonded warehouses, customs duty to be paid by 31 May 2022


Excise tax (duty)

  • Estimated assessments for non-declaration or false declaration of excise duty or surtax on manufacturing of commodities
  • Increased excise tax to 25% (from 20%) on cigarettes
  • Introduction of flat rate of excise tax on energy drinks
  • Excise tax on telephone, airtime, data, and pre-owned motor vehicles


Capital gains tax

  • Amendments to tax calculation for certain assets
  • Restrictions on the deductions for capital gains tax


Other tax measures for corporations

  • Income tax benefits for donations made to medical institutions
  • Tax credit with regard to the employment of physically challenged individuals
  • 30% of the value of airtime allowed employees deemed to be for personal use (unless otherwise demonstrated)

Read a February 2022 report [PDF 13 MB] prepared by the KPMG member firm in Zimbabwe 

 

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