ZIMBABWE - Submission of VAT returns and payments

June 2019

The Zimbabwe Revenue Authority (ZIMRA) noticed that some businesses that are conducting business in multiple currencies are withholding and collecting VAT in multiple currencies. ZIMRA has clarified that businesses should remit VAT in the same currencies they collect the output tax in without converting the foreign currency to the Zimbabwean currency (Real Time Gross Settlement (RTGS) dollars).

As part of the clarifications, ZIMRA announced that beginning 22 February 2019 all VAT registered operators are required to comply with Statutory Instruments 33 and 32 of 2019. Of specific interest are the following requirements:

Registered operators (VAT registrants) are required to report and remit VAT in the applicable foreign currency when the price paid on taxable supplies is paid for in a foreign currency.
For the period beginning 1 March 2019 and going forward, they must complete and submit one VAT Return (VAT7) declaring sale and purchase transacted both in the foreign currency the transactions is in (for example, US dollar, Rand, Pula, and so on) and RTGS dollars.
In completing their VAT Return, the foreign currency transactions must be converted to RTGS dollars using the interbank exchange rate prevailing on the day of the transaction. The converted amount must then be added to the RTGS dollars transactions and a single return in RTGS dollars is submitted to ZIMRA.
The tax payable in RTGS dollars must be remitted to the Commissioner General’s RTGS Account while the tax payable in foreign currency must be paid to the Commissioner General’s Foreign Currency Account (FCA).
Registered operators should ensure that tax invoices are issued in the buyer’s tendering currency.

ZIMRA pays the VAT refunds in foreign currency where the registered operator can prove that the tax was paid in foreign currency.

Rebate of duty on goods imported by religious organisations

Legislation has been put in place for the duty-free importation of religious audio and video material donated to and imported by religious organisations. For the materials to qualify for duty-free importation, they must be for free distribution to persons in need.

Revision of duty on fuel

The customs duty rate for petrol was reduced from Zimbabwe RTGS dollar 2.31 per litre to Zimbabwe RTGS dollar 1.15 per litre and diesel from Zimbabwe RTGS dollar 2.05 per litre to Zimbabwe RTGS dollar 0.90 per litre effective from 21 May 2019.

Maxwell Ngorima
mngorima@bdo.co.zw