VAT forex duty vague, says Delta

29 Dec, 2022 - 00:12 0 Views
VAT forex duty vague, says Delta ZIMRA

eBusiness Weekly

Tapiwanashe Mangwiro

Delta Corporation, Zimbabwe’s largest beverages manufacturer, says the Zimbabwe Revenue Authority (Zimra) wants taxes calculated using certain formulae not exactly consistent with any legal provisions and which may cause complications.

“As we moved to a multi-currency environment, there are formulas by which Zimra wants the taxes to be calculated, and some of them are not necessarily in line with legislation,” company secretary, Alex Makamure recently said.

“So, you end up with a dispute over whether this Value Added Tax was supposed to be paid in foreign currency or supposed to be paid in local dollars.”

Earlier this year, Zimra said it would clamp down on companies evading their forex tax obligations.

“The tax code or the tax is a little bit vague in terms of some of the things Zimra wants us to do, and that is the issue you will find in a multi-currency environment,” said Makamure.

“We have always operated for tax purposes in a mono-currency except where you are paying duties for imported things, where they would have said it’s easy because it is one item and it is charged duty in foreign currency at this level.”

He added that “when it is taxes, which are both income and deductions, the whole problem becomes quite a mash that needs to be sorted.”

Major risks facing the economy entail redollarisation pressures, exchange rate risks, inflationary pressures, weak aggregate demand and climate change.

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