Direct taxes

2. Taxation can be defined as a
government policy that is targeted at
collecting revenue for the financing of
public expenditure.

3.  A tax is a compulsory contribution to state
revenue levied by the government for example on
worker’s income and business profits.
 The main collecting agent of tax for the state is
the Zimbabwe Revenue Authority – ZIMRA.

4.  These are taxes levied on income and wealth of
individuals and companies.
 The burden of these taxes is borne by the person
or organization responsible for paying taxes.
 Tax burden simply means the amount of tax to be
paid by a company or individual(s)

5.  There are a number of direct taxes in Zimbabwe
and these include:
 Corporate tax
 Pay As You Earn (P.A.Y.E)
 Capital Gains withholding tax (immovable
property)
 Capital Gains withholding tax (marketable
securities)
 Resident shareholder’s tax
 Non Resident shareholder’s tax
 Non resident tax on remittances
 Presumptive tax

6.  Non resident tax on royalties
 Intermediated money transfer tax
 Automated financial transaction tax
 Tobacco levy
 Property or insurance commission tax
 Informal Trader’s tax

7.  This is a tax charged on the income of
individuals.
 Zimbabwe individual income tax is imposed
at progressive rates from 20% up to 50 %.
 No tax is payable on income of not more than
$3600 per per year.
 Basis of paying individual pay tax
 Individuals pay tax only on Zimbabwe-
source earnings or income deemed to be
from a Zimbabwean source.

8.  Source – this refers to where services are
rendered and the payment location is
irrelevant.
 Temporary Absence -Temporary absence
means absence for a period or periods not
exceeding in aggregate 183 days within a
year of assessment. – if greater than 183 days
then not subject to tax in Zimbabwe.

9.  The employer is the agent of ZIMRA for the
collection of pay as you earn. He must pay
over the PAYE collected to ZIMRA on the 10th
of the month following the month of
deduction.
 Thus PAYE for the month of July 2015 is due
on 10 August 2015. The tax implication for
any default of this requirement is a 100%
penalty and 35% interest p.a.

10. LEVEL OF TAXABLE INCOME SPECIFIED PERCENTAGE (%)
Up to $3600 0
$3601-$18000 20
$18001 -$36000 25
$36001-$60000 30
$60001-$120000 35
$120001-$180000 40
$180001-$240000 45
$240001 and above 50

11.  If John has a taxable income of $ 36
000,then P.A.Y.E will be calculated as follows:
 Taxable income $ 36 000
Less tax (25% * 36 000) $ 9000
Net salary $ 27 000
NB The 25% is obtained from the tax bracket.

12.  It is a form of tax paid by a corporation or
company based on the amount of profit
generated.
 Companies and trust, like individuals are
taxed on income derived from an actual or
deemed Zimbabwean source.
 Foreign interest and dividends are deemed
from a Zimbabwean source.
 In Zimbabwe corporate tax is charged at 25%
of the taxable income of the company.

13.  The provisional payments dates for the year
ending 31st December 2015 are as follows:
 1st quarter 25th March 10%
 2nd quarter 25th June 25%
 3rd quarter 25th Sept 30%
 4th quarter 20th Dec 35%
 100%

14.  Net Profit xxx
 Add disallowable deductions xxx
 xxx
Less: allowable deduction (XXX)
Taxable income xxxx
Less: Corporate tax xxxx
Income after tax xxxx

15. TYPE OF DIRECT
TAX
DESCRIPTION WHEN THE TAX
IS REMITTEDED
RATE OF TAX
Non Residents
Shareholders'
Tax
This is a tax
charged on
dividends paid
by Zimbabwean
Companies to
non –resident
shareholders .
Within 15 days
from the date of
distribution of
dividends.
10% for
dividends from
securities listed
on stock
exchange.
15% for other
dividends
Resident
Shareholders'
Tax
This is a tax
deducted at
source from
dividends paid
by Zimbabwean
companies.
Within 10 days
from the date of
distribution of
dividends.
10% for
dividends from
securities listed
on stock
exchange.
15% for other
dividends.
Non Residents'
Tax on Interest
This is a tax
charged on
interest income
for non
residence of
Zimbabwe.
Within 10 days
from the date of
payment
15%
Non-Residents'
Tax on Fees
This is a tax in
respect of fees
Within 10 days
from the date of
15%

16. Non-Residents'
Tax on
Remittances
This is the tax
on funds
transferred to
Zimbabwe by a
migrant worker.
Within 10 days
from date of
remittance
15%
Non-Residents'
Tax on Royalties
This is a tax
charged on
royalties for
those who are
non residents of
Zimbabwe
Within 10 days
from the date of
payment
15%
Residents' Tax
on Interest
This is a tax
charged on an
interest income
paid or credited
to residents in
Zimbabwe
Within 10 days
of the date of
payment
15%
Tobacco Levy This is tax
charged on
tobacco buyers.
Within 15 days
of the date of
distribution
1.5%
Automated
Financial
This is a tax
charged for
By the 10th day
of the month
0.50c

17. TYPE OF DIRECT
TAX
DESCRIPTION WHEN THE TAX
IS REMITTEDED
RATE OF TAX
Presumptive tax
e.g Informal
Traders' Tax
This is the tax
charged on
informal traders
.
By the 15th day
of the month
following the
month in which
the tax was
recovered
10%
Intermediated
Money Transfer
Tax
This is a tax
charged on
inter-bank
transactions .
By the 10th day
of the month
following the
month in which
the transaction
was effected
0.50c
Property or
Insurance
Commission Tax
This is a tax
charged on
transfer of
ownership of
property.
By the 10th day
of the month
following month
of payment
20%

18.  Capital gains tax is the tax chargeable on
gains from a source within Zimbabwe from
the sale or deemed sale of specified assets:
for example immovable property (land and
building) and marketable securities (stocks &
shares).
 Capital gains from the sale or disposal of a
marketable security and immovable property
acquired before 1 February 2009 is taxed at
a rate of 5%.

19.  A sale of a marketable security and
immovable property acquired after 1 February
2009 is taxed at 20 % after allowing
deductions such as the cost of acquisition .

20.  Tax burden -Tax burden simply means the
amount of tax to be paid by a company or
individual(s)
 Horizontal equity –This is when those who
earn the same salary are charged the same
amount of tax.
 Vertical equity in taxation – People with
higher income should pay more tax.

21.  Tax evasion – is when one falsifies profit
figures to reduce tax to be chargeable and
this is illegal.
 Tax avoidance –is when one avoids to pay tax
for example when one chooses to take a
detour route than passing through a toll gate.
 Toll gate fees- when a fee is charged for
using a roadway for passage .

22.  A direct tax cannot be shifted to another
individual or entity.
 The individual or entity upon which the tax is
levied is responsible for the fulfilment of the
tax payment.