PHILLIMON MHLANGA
The Zimbabwe Revenue Authority (ZIMRA) has extended the deadline for income tax returns to August 31 to give breathing space to companies that are battling to contain the effects of the coronavirus pandemic.
This comes at a time when revenue authorities across the world are facing a truly unprecedented situation due to the deadly virus.
Economies across the globe, Zimbabwe included, have had to be shut down in the quest to slow down and limit the spread of the virus, something which has caused economic distress throughout societies as many businesses cannot trade and borders are closed.
In Zimbabwe, there has been frustration and uncertainty around the difficulties in submitting income tax returns, value added tax (VAT) processing and the publication of the country’s transfer pricing practice notes. ZIMRA commissioner general Faith Mazani could not be reached for comment by the time of going to print.
But, in a communication to clients this week seen by Business Times, KPMG Zimbabwe partner, Vinay Ramabhai, said the due date for the submission of income tax returns has been extended to August 31, 2020.
“This applies to all taxpayers with a 31 December 2019 year end. Taxpayers with approved year end dates other than 31 December 2019 are expected to submit their returns on the dates previously agreed by ZIMRA.
Where taxpayers have concerns in meeting these previously agreed submission dates, they should engage ZIMRA immediately.
It is important to note that the extension also affects the due date for the Transfer Pricing Return (ITF12C2) since it is submitted as an attachment to the Income Tax Return (ITF12C),” Ramabhai said.
He said ZIMRA has issued transfer pricing practice notes which are to be considered together with the transfer pricing provisions under Section 98B, as read with the 35th Schedule of the Income Tax Act.
Under Public Notice number 20 of 2020, ZIMRA will endeavour to expedite the processing of legitimate VAT refunds and process such refunds within 30 days, provided that the taxpayers meet specified criteria.
The public note sets out the criteria and procedures to be followed by taxpayers to facilitate this process.
ZIMRA’s latest move comes after African Tax Administration Forum (ATAF) in its latest publication suggested the extension of tax deadlines, flexible payment plans, suspension of penalties and interests and suspension of compliance and enforcement activities and expedited tax refunds.
On extension of deadlines, ATAF said onsite regularisation can be carried out when the business environment has normalised.
This will require resources like digital storage capacity and clear guideline and communication to all parties on the process obligations and responsibilities.
The deadline for filing tax returns should be extended to accommodate the disruption taxpayers may be facing due to the pandemic.
ATAF said all taxpayers should be considered as the extension will play a dual role of easing burden on taxpayers and limiting the transmission risk of revenue authority staff where digital channels are limited or non-existent.
ATAF also said revenue authorities, across the continent should consider granting taxpayers flexible payment plans like monthly or bimonthly instalment payments over a certain period beyond the extant due date.
This will ease some of the economic burden the pandemic may cause for the taxpayers.
The extension of the deadline will bring relief to struggling companies that are battling to stay afloat after the Covid-19 induced lockdown has seen the temporary halting of operations.
In a survey on the impact of Covid-19 on Zimbabwe, the Confederation of Zimbabwe Industries (CZI) said members recommended that government has to review ZIMRA tax submission and payment procedures and deadlines.
“Payment of PAYE, VAT, QPD [quarterly payment dates] timelines need to be extended or even postponed. Future tax breaks to cushion businesses should be considered,” CZI said.
