5/22/2018 Mechanics of VAT | Zimbabwe Revenue Authority (ZIMRA)

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1. What is VAT and when was it introduced in Zimbabwe?

Value Added Tax (VAT) is an indirect tax on consumption, charged on the supply of taxable goods and services. It is
levied on transactions rather than directly on income or profit, and is also levied on the importation of goods and
services. This tax was introduced in 2004 to replace the former sales tax regime. Popular Links

Enabling Legislation: - ASYCUDA World

Customs and Excise Duties
Value Added Tax Act (CHAPTER 23:12) Importation of Motor Vehicles
by Private Individuals
Value Added Tax (General) Regulations (Statutory Instrument 273 of 2003
Employees Tax - Pay As You
2. Rates of VAT Earn (PAYE) System
Calculation of Duty on
i Standard rate of 15% importation of private motor
vehicles and suspension of
Generally, all goods and services are standard rated unless specifically exempted, zero-rated or subject to VAT duty on Motor Vehicle
at a special rate. imports by the physically
handicapped persons
ii Zero-rate (0% )
Tax and Customs
Exports of goods from Zimbabwe to an address in an export country. Requirements For New
Businesses
Basic foodstuffs such as sugar etc.(listed in the Vat Regulations)

iii No value added tax is chargeable on exempt supplies.

Examples of exempt supplies include:

Like Avoid Chibanda and 21K
Financial services. others like this

Provision of electricity for domestic use

Provision of piped water for domestic use
Rates charged by Local Authorities.

Provisions covering the treatment of supplies for VAT purposes are specifically covered in the VAT Act and the VAT
Regulations and taxpayers are encouraged to familiarise with both pieces of legislation.

SI 26 A of 2017 removed some goods from zero rating and standard rating and placed them under exempt supplies.

3. Who should charge VAT?

Any person who is registered or required to be registered for VAT is required to charge value added tax. This means
any person who is carrying on trade as defined in the legislation. Taxpayers should check with the Zimbabwe Revenue
Authority and obtain clarification on what is considered trade for the purposes of registration for value added tax.

4. What are the Requirements for Registration?

a. Compulsory Registration

Applicable to traders whose taxable supplies exceed or are likely exceed $60,000.00 in a period of 12 months.

b. Voluntary Registration

Applicable to traders who wishes to register voluntarily and whose taxable supplies do not meet or exceed the
$60,000.00 threshold and have in the past not been found having failed to comply with the legislation.The trader will be
required to have a fixed place of abode or business and should maintain records of his transactions.

Application for value added tax is done online through the ZIMRA e-services portal, and attach soft copies of required
documents to the application. Required documents for compulsory registration are sales records, invoices or
projections and certified copy of the current bank statement among others.

ZIMRA will process the application and carry out visits to the premises of the applicant to verify the indications and
attachments included in the application. When everything is in order, ZIMRA will be able to register successful
applicants within 14 days.

5. Obligations of a Registered Operator

The registered operator is required to: -

Charge VAT
Issue tax invoices within 30 days of supply and these invoices should have the features, which are outlined in
the Act.

Remit the VAT to ZIMRA and submit a VAT return on or before the 25th day of the month following the month in
which the VAT was collected.
Maintain a record of all transactions.
Fiscalise.

6. How does a Registered Operator Calculate the Tax that should be Paid to ZIMRA?

The registered operator completes a value added tax return (VAT7) on which he declares the total sales (both cash and
credit) and tax that he charged (output tax), and the total purchases and the tax he was charged (input tax).

He then subtracts the tax on purchases (both cash and credit) from the tax on sales. In the event that the result is
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5/22/2018 Mechanics of VAT | Zimbabwe Revenue Authority (ZIMRA)
positive, that amount should be paid to ZIMRA and where the result is negative, ZIMRA will refund this to the taxpayer.

Where the refund is $60 or less, the amount is held in credit in the taxpayer’s account and will be refunded together
with any future refunds when such cumulative refunds reach or exceed $60.

Returns should be submitted online and payments should be made through the banks.

7. What are the requirements for one to claim tax on purchases (Input Tax)?

The claim must be made on the VAT return within 12 months of the date of invoice for the expenses incurred by the
registered operator.

The registered operate must be holding the tax invoices, bills of entry, credit notes, debits note, or other sufficient
documents in support of the expenses incurred.

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legal consequences that may arise due to information contained on this website.

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