Income Tax Bill submitted to President | The Herald

via Income Tax Bill submitted to President | The Herald November 25, 2013

THE new Income Tax Bill, which seeks to broaden the tax base, repeal and replace the Income Tax Act and Capital Gains Tax Act, has been submitted to President Mugabe for his assent. According to the Government Gazette published on Friday, the Bill was sent to President Mugabe by Clerk of Parliament Austin Zvoma on November 8.

“It is hereby notified, in terms of Section 131 (5) of the Constitution of Zimbabwe that the Speaker of the National Assembly has, on 8th

November, 2013, sent the Income Tax Act to his Excellency the President of Zimbabwe for his assent,” he said.

The Bill proposes a major shift from a source-based tax system to a residence-based tax system.

If it becomes law, Zimbabwean residents will be subject to tax on income and gains from anywhere in the world subject to an offset of the foreign tax paid.

Temporary residents would generally be liable to pay Zimbabwean tax on their worldwide income which is required to be remitted to Zimbabwe in terms of the Exchange Control Regulations and all income derived from a source in Zimbabwe.

The Bill also provides that tax deductible expenses can only be those closely related to the production of the income in question.

During consultations held across the country earlier this year, the Bill was criticised as stakeholders raised concerns that while reforms were mainly expected to increase inflows into Government coffers, flaws in the proposed law could actually result in many taxpayers evading tax obligations.

There were concerns that the public would be taxed on virtually every earning they got, including gifts.

The Bill also proposed to tax those in the Diaspora.

Then Finance Minister Tendai Biti later made several concessions to the amendment of the Bill after a Parliamentary Committee on Budget, Finance and Investment Promotion also raised reservations on it.

One of the amendments raised was Clause 26 that sought to levy taxes on Diaspora funds which the committee felt would lead to drying up of such funds coming to Zimbabwe.

Mr Biti also consented to amendment of the clause on penalties where the Bill sought to impose 100 percent penalty on non-compliant individuals and corporate.

Another clause he consented to related to the US$10 000 as the maximum deduction allowed on motor vehicles which stakeholders felt that the amount was too low hence it encouraged people either to buy second-hand vehicles or those that were unsafe since good ones hovered around US$25 000.

On the residence-based system, Mr Biti conceded to give an amnesty on taxpayers on condition that they make full disclosures of foreign assets and pay an appropriate figure to be decided.

He agreed to include a provision on the interpretation clause that a court was bound by the law of precedence in interpreting the tax law to allay fears from stakeholders.

Some of the provisions he declined to concede to related to submission that employees from the private sector should not have their housing and transport allowances taxed as just like civil servants.

The other aspect was on Capital Gains Tax after Mr Biti allayed fears that arose from the committee that the Bill seemed to assume that the entire proceeds of such assets were taxable without any deductions.

 

COMMENTS

WORDPRESS: 13
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    Tjingababili 8 years ago

    PHILLADEPHIA USA: NO TAXATION WITHOUT REPRESENTATIONS! CREATIVE NAIVETY, IT IS!

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    Wow. Treasury should demand about 99 billion us dollars inoutstanding tax salted away by zanu criminals to secret bank accounts in dubai singapore china switzerland malaysia Angola zumaland equatorial guinea kuwail and in the underworld mafia. The new law means forensic investigation into unexplained wealth assets lavish lifestyles obscene luxury boasted flaunted by the zanu looters and plundering families relatives…this forensic audit by the new people’s govt. We’re rich again as a nation!!!!!!!!!!!!!!!!!!

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    moyokumusha 8 years ago

    NO VOTE – NO SAY- NO TAX. How do they propose to collect it? Tax all the ZANUPF’s who have the wealth and big houses first.

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    Charlie nyikadzino 8 years ago

    Fixing the wrong part. Actually Zanu pf has no capacity to fix the economy. If it does there is no need to change the tax system

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    This bill was crafted by Tendai Biti when he was finance Minister. Surely Mwari makagona makapindira if these guys had gotten into power they definately would have been worse than Zanu PF. Is it a crime to be Zimbabwean. You guys failed to fix the economy and now having spend fortunes trying to have a life outside our borders, you are now following us. You denied us the vote, showing that you dont need us but now why on earth should we give you our money. This is like paying to be citizens. What services do you give to us? majairira manje. Pfuti dzinorira manje manje. Our coming into the diaspora also helped us to get connections with people with unlimited supply of guns. Beware!!

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    Bruce 8 years ago

    No taxes revenue to Mugabe who refused the vote of those residing outside Zimbabwe. Beside the process of collecting the tax will be costly. Try it

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    Mr Mixed Race 8 years ago

    Maybe Mr Biti was too excited with power,I think he is regretting some of his misguided proposals now.

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    They now want to tax us(Diaspora) you refused us the vote now I matter, pliz my family will take their money from another country

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    adam jones 8 years ago

    Correct me if I am wrong – but my understaing is that only those resident in Zim will be taxed including on their foreign earnings – if any. The diaspora taxation was dropped because it was unworkable. Hameno kuti vaBiti vanga vasvutei. Nyaya iripo ndeyekuti enacting the bill will not change much because those who are resident in Zim and are earning maney in foreign lands are few. They are mostly Zanu thieves or associates thereof. They will just avoid paying tax as they do today. Ko tadii kutanga nemari yama diamonds? What is happening to that money? Where is it going? So Zanu thieves want people who work hard to pay tax on their hard earned cash when they plunder a national resurse that God to us all? Logic on its head I tell u.

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    Mafuta 8 years ago

    The insatiable maw. Ben Franklin’s line poverty wants some things, greed wants many things, avarice wants all things (something like that) comes to mind.

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    No ways just shows you that this govt is so power hungry that they will stop at nothing to steel and fleece their own people of their own hard earned money , so they can live the life of Riley!And they are also a iligitmate govt!How can the dictate!

  • comment-avatar

    No ways just shows you that this govt is so power hungry that they will stop at nothing to steel and fleece their own people of their own hard earned money , so they can live the life of Riley!And they are also a iligitmate govt!How can they dictate!