HARARE — Companies that have not yet complied with the Zimbabwe Revenue Authority (Zimra)’s fiscalisation programme are in for a fix amid revelations that the revenue collector has resolved to give tax clearance certificates only to compliant firms. Information gathered by business daily revealed that companies that have minimum monthly sales of $20 000 will only get their ITF 263 certificates upon submission of proof of payment for fiscalised tax registers (FTRs) from Zimra approved suppliers. An ITF 263 is a tax clearance certificate that is issued to clients who are fully paid up and whose Income Tax, Value Added Tax (VAT) and PAYE returns are up to date.
A valid tax clearance confirms that its holder’s tax position is satisfactory and there is no need for the payer to withhold 10 percent tax in a business transaction.
Companies polled by businessdaily said it would be difficult for them to get tax clearance as they have no money to buy the “expensive” fiscalised registers.
“We won’t be able to deal with those large corporates which do their tender processes above board because we are not cleared by Zimra. A lot of corporates are updating their suppliers list and we are left out because of this,” said a consultant who requested not to be named.
Government enforced the fiscal measure in a bid to plug tax collection holes and increase VAT collections by 20 percent.
According to Zimra, the fiscalised registers will improve collection of VAT through installed high security features.
FTRs record sales at the point of sale and the device is identified by a security number.
Each FTR is also fitted with a memory that is placed in a permanent non-transparent substance that enables the permanent single recording of data by the programme for the register operations, to deny the user a possibility of erasing the fiscal data.
The tax registers will be installed by retailers in line with the VAT fiscalised recording of taxable transactions amendment regulations of 2010, which requires all companies with an annual turnover of $240 000 to capture all their transactions using electronic registers.
Zimra said other registered operators who are not in retail are required to use either an electronic signature device or a non-fiscalised electronic register together with a fiscal memory device.
Zimbabwe’s industry representative body, Confederation of Zimbabwe Industries, recently proposed the installation of the registers to improve potential revenue collection from the informal sector, a move shot down by analysts arguing that the implementation costs — of between $600 and $3 200 per unit — would weigh down small businesses.
Although there has been resistance and some businesses have been lobbying for an extension of the implementation deadline to next year, retailers such as OK Zimbabwe have indicated that they would implement the project within months.
The Zimbabwe Stock Exchange listed retailer’s implementation costs — with up to 600 cash points — may top millions, independent observers say.
Zimra is the country’s revenue collector responsible for the collection of Vat, customs duty, PAYE, corporate tax, other taxes and non-tax revenue.