How to get Zimra tax clearance for 2016

By Phil Chichoni

As we approach year-end, most businesses will start rushing to renew their tax clearances, which all expire on 31 December 2015. Companies that wish to participate in the supply of goods and services to big companies will especially want their tax clearances early in order to be included in their Approved Supplier Lists. If you miss out in applying in January then you will not be able to do business with major companies for the whole of 2016, which could cost you big opportunities.
What is tax clearance why does every business need one?
A tax clearance certificate is a document issued by the Zimbabwe Revenue Authority certifying that a business or an individual in business is in compliance with the tax laws of the country. It states that “your tax position is satisfactory and therefore no 10% should be deducted”.
Under Zimbabwean tax laws, if you supply a product or service to a business or state enterprise, you must produce a valid tax clearance certificate. If you fail to produce one, then enterprises you supply are required to deduct 10% of the gross value of your invoice and submit it to Zimra. Considering the low profit margins in business today, this 10% can plunge you into a loss.
You don’t only need tax clearance in order to avoid suffering the 10% deduction. You also need it if you want to do business with most big and medium enterprises that insist in dealing only with tax compliant suppliers. Most are forced by their corporate governance policies to deal only with tax compliant businesses, while other do not want to be bothered with the paper work and labour involved in deducting the 10% and sending it to Zimra.
So, you better be tax compliant if you want to grow in business in 2016.
How to get the 2016 tax clearance
Everyone, individuals, companies, partnerships and cooperatives, who want to venture into any business are required to register with ZIMRA and comply with all obligations as stipulated in the legislation.
Here are the requirements for an individual:
• Copy of current Bank Statement
• Certified copy of Identity Document
• Proof of residence in the form of utility bills
• Sales invoices for Income tax registration
• Payroll schedule for PAYE registration
• Completed REV1 form, available from the Zimra website

The requirements for a company are as follows:
• Copy of Certificate of Incorporation
• Copy of Memorandum of Association ,CR14 and CR6
• Copy of a current Bank Statement for the company
• Copy of a current Bank Statement of one of the Directors, who will be the Public Officer
• Certified copy of Identity Documents for any two Directors
• Completed REV1 form for the company, available from the Zimra website
• Completed REV1 form for the Public Officer
• Proof of residence for the two Directors and for the Public Officer in the form of utility bills
• Sales invoices, lease agreement or proof of stock for Income Tax registration
• Payroll schedule for PAYE registration
• Letter appointing Public Officer stating Name, Identity Number, Residential Address and statement to the effect that the Public Officer is a signatory to the company’s bank account. (The Public Officer should be a Zimbabwean resident.)
You submit these documents at your nearest Zimra office. After the documents have been processed, you will be allocated a Business Partner (BP) number, which will be your identifying number for all transactions with Zimra. You will also be allocated a tax clearance certificate, which will declare you a tax compliant business or individual. From then on, you need to pay all the required taxes and submit the appropriate returns to Zimra.
Related article, to appear in next week’s newsletter: HOW TO REGISTER FOR VAT IN ZIMBABWE.
If you need more detailed information on this and other tax related issues, get a copy of the book A Simplified Guide to Taxes for SMES, available from SME BusinessLink, call 04-700812 or 0777 774 007, and you will also get a free one year subscription to BusinessLink magazine which has lots more business advice and ideas.

Have a great day

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