Source: Govt widens forex levy basket -Newsday Zimbabwe
Amon MurwiraGOVERNMENT is chasing all the United States dollars it can find on the market with Higher and Tertiary Education minister Amon Murwira amending the Manpower Planning and Development (Levy) to allow for collection of levies in foreign currency.
Statutory Instrument (187 of 2022) cited as the Manpower Planning and Development (Levy) (Amendment) Notice, 2022 (No. 2), compels every employer with a wage bill in foreign currency to pay taxes in forex.
“Where the wage bill is a combination of United States dollars and Zimbabwe dollars, the employer concerned shall pay his or her levy in both Zimbabwe dollars and such foreign currency on a pro rata basis” read part of the SI which is a supplement to the Zimbabwean Government Gazette dated November 4, 2022.“This notice shall come into effect on the date of publication,” the notice read.
The development comes after government ministries and local authorities were banned from charging fees and levies exclusively in foreign currency.
The City of Harare was early this year forced to reverse its plan to charge for selected services exclusively in foreign currency. The Zimbabwe Revenue Authority (Zimra) is also insisting on tax remittances in the currency of transaction as part of efforts to boost the government’s forex reserves. Government is also charging a 4% tax on forex transfers under the intermediary money transfer tax.Earlier this year, Zimra said it was clamping down on corporates who evade forex taxes.
Section 4A of the Finance Act and section 38 (6) of the Value Added Tax Act requires traders to pay taxes in the currency of the transaction.
Zimra said it had noted with concern that some businesses were paying taxes in local currency while they charged their goods and services in United States dollars.
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