ZIMRA clarifies PAYE and VAT calculations

31 Jul 2019

NANGO Board Chairperson, Ronika Mumbire, chaired a meeting between Zimbabwe Revenue Authority (ZIMRA) officials and NANGO members on 5 June 2019. The meeting deliberated on the PAYE and VAT calculations that were introduced through Public Notice 17 of 2019.

The ZIMRA clarified that:

Employers are required to calculate PAYE using the relevant tax tables. The remuneration in RTGS$ and foreign currency should be added then PAYE determined based on that total amount.

One PAYE return [Form P2] shall be completed in RTGS Dollars. The employer must attach separate schedules showing total remuneration and PAYE in foreign currency and in RTGS Dollars. Tax payable in RTGS Dollars shall be remitted to the Commissioner General’s RTGS Account and the tax payable in foreign currency into the Commissioner General’s Nostro FCA.

The employer shall:

  • Convert remuneration earned in foreign currency to RTGS Dollars at the prevailing Interbank rate;
  • Add the remuneration determined above, to the remuneration earned in RTGS Dollars to get total remuneration.
  • Deduct allowable deductions to obtain the taxable amount. Deductions earned in foreign currency should also be converted to RTGS$. 
  • Calculate PAYE in RTGS dollars using the tax tables.
  • Subtract the credits to determine the PAYE payable. Any credits earned in foreign currency should be converted to RTGS$.
  • Compute tax payable in foreign currency and in RTGS proportionately.  

Concerns

  • CSOs with concerns regarding the new calculations were encouraged to approach the Ministry of Finance and Economic Development (MoFED) through NANGO as ZIMRA is only an implementing organ for the MoFED. Tax tables are created by Executives and given o ZIMRA to implement.
  • CSOs should advocate for a fixed rate for foreign currency as fluctuating rates affect CSO programming.
  • CSOs are advocating for an increase of the tax free threshold.
  • CSOs with queries regarding account balances of FCA accounts following conversion to Nostro accounts should approach ZIMRA for assistance and clarity

 

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