Source: Zimra to tax donations – DailyNews Live
Tendai Kamhungira 6 January 2019
HARARE – As the broke Zimbabwean government seeks to seize every cent it
can lay its hands on, the Zimbabwe Revenue Authority (Zimra) will tax
specific classes of donations to beef up the fiscus.
The tax collector said even though donations are not incurred for the
purposes of trade or in the production of income, there are circumstances
under which such are taxed.
According to Zimra, donations to the National Scholarship Fund, the
National Bursary Fund – a charitable trust administered by the minister
responsible for Social Welfare or the minister responsible for Health –
are liable to tax and there is no limit to the amount.
The principle also applies to funds to any one of the following, provided
it is approved by the minister responsible for Health:
i. Purchase of medical equipment for a hospital operated by the State,
local authority or religious organisation.
ii. Construction, maintenance or extension of a hospital operated by the
State, local authority or religious organisation.
iii. Procurement of drugs to be used by a hospital operated by the State,
local authority or religious organisation. In such cases, the maximum
allowed as a deduction is US$100 000.
Zimra also said a research institution approved by the minister
responsible for Higher and Tertiary Education is also taxable, with the
maximum amount allowed as a deduction pegged at US$100 000.
The tax collector also said public private partnership funds, otherwise
known as PPPs, are subject to this requirement with the amount allowed as
a deduction pegged at US$50 000.
Also among those that can be taxed is the Destitute Homeless Persons
Rehabilitation Fund, established under the ministry of Finance, which has
an allowed maximum reduction of US$50 000.
Zimra said clients who made wrong treatment of donations or have made
other errors or omissions in their tax declarations must make a voluntary
disclosure to the taxman to have penalty waived in full.
“…the law provides for the deduction of certain donations under
prescribed conditions. Section 15(2) (r) to 15(2) (r5) of the Income
Tax Act [Chapter 23:06] stipulates the circumstances in which donations
are allowed and the maximum amounts that can be deducted…,” Zimra said
in a statement.
Government has been struggling to make ends meet and is using every means
necessary to get revenue through Zimra.
Recently, Treasury introduced a two percent tax on every electronic
transaction beyond $10 in a bid to raise funds to pay off some of internal
and external debts.
Besides this unpopular new tax which received widespread condemnation when
it was introduced in October last year, government also started demanding
payment of duty for imported motor vehicles in foreign currency.
Previously duty on imported vehicles was paid through the bond note or
through the virtual Real Time Gross Settlement (RTGS) system.
Members of the public have also criticised government’s double-standards
and hypocrisy as other services are paid through RTGS and the bond note,
which is touted as being at par with the United States dollar although on
the parallel market, the value of the surrogate currency is down thrice
the USD’s worth.
The bond note has found itself on a slippery slope after government
announced new fiscal and monetary policies, which demand the creation of
separate foreign currency accounts from that of the RTGS and the surrogate
Many observers believe government is desperate to raise funds by hook and
crook in a bid to patch the ballooning debt, exacerbated by the printing
of large sums of Treasury Bills.
To its credit, Zimra has been surpassing its targets over the years and
has been partaking in campaigns to conscientise taxpayers on the need to
voluntarily contribute to the government’s purse.
It has further been plugging leakages through putting mechanisms that
effectively deal with corruption within its workforce and implementing
lifestyle audits to weed out any possible underhand dealings.