The secret is to keep complete tax records
By Phillip Chichoni
15 January, 2013
I was at the Zimra offices at Kurima House yesterday to collect my tax clearance as well as those for some clients. The queues are still long, three weeks since 2014 tax clearances began being issued. Discussing the issue of long queues with some people I met there, it seemed the real cause is that some people keep on being turned back to find some missing documents or to complete some documents they would have forgotten to complete. As a result some spend the whole week or more going to and fro the Zimra offices. That’s a waste of valuable time and resources.
The secret to getting your tax clearance without a lot of stress is to KEEP YOUR TAX RECORDS COMPLETE AND IN ORDER throughout the year.
There are basically five types of records that a small to medium sized business must have:
a) PAYE returns. This is a record of employee tax that you remit to Zimra on the 10th of each month. Note that late remittance and/ or late submission of returns results in penalties being charged, so make sure you submit them on time every month.
b) VAT returns. This applies to companies that are VAT registered. All businesses with turnover of $60,000 or more per month are required to register for VAT. Failing to register for VAT when you meet the compulsory threshold can result in heavy penalties and prosecution.
c) QPDs. This is corporate tax which is paid quarterly. Towards the end of every quarter, that is on the 25th of March, June, September and 20th December, every business must pay a prescribed percentage of their estimated tax bill for the year.
d) ITF12. This is the annual financial statements for the previous year. These must be submitted to Zimra by the 30th of April following the end of the year. In 2014, you must provide proof that you submitted your 2012 financial accounts to Zimra.
e) ITF16. This is a record of employee taxes paid throughout the year. The record should show details of people your business employed during the ended year, including their earnings, benefits and tax paid. These should be sent to Zimra as a soft copy on a CD or USB drive, or by email to the appropriate address which Zimra provides.
Now if you keep all these records, together with proof of payments, all you need to do is to take your complete file to Zimra and you will get your tax clearance chop chop.
Phillip Chichoni is a business planning, accounting and tax consultant who works with SMEs. He is also a trainer, coach and author, having written books that include “Business Planning Simplified”, The Entrepreneur’s Guide to Starting a Business in Zimbabwe”, “High Impact Low Cost Marketing Strategies for SMEs” among others. You can contact him by email, email@example.com, or visit http://smebusinesslink.com.