Budget proposals for the year 2020
VAT standard rate
The VAT standard rate in the Finance Act has been proposed to be reduced from 15% to
14.5%.
VAT registration threshold
The threshold for VAT registration is being increased from the current ZWL 60,000 to ZWL 1,000,000.
Certain imported services deemed to be locally supplied
Amendments are proposed to section 13 of the VAT Act to include the supply of:
- Radio and television services from outside Zimbabwe to an address in Zimbabwe,
- Electronic services by an electronic commerce operator domiciled outside Zimbabwe to a person resident in Zimbabwe.
In both cases the supply shall be deemed to be a supply made in Zimbabwe.
The obligation to charge and account for the tax rests on the supplier or his or her duly appointed representative in Zimbabwe.
Value Added Tax on foreign services
An amendment has been proposed for the definition of input tax in section 2 of the VAT so that it includes imported services. The intention is to allow registered operators to claim input tax.
Customs concessions on business
Duty free concessions have been extended to the following industries in Zimbabwe to enable them to grow:
- Tourism industry
The Zimbabwe Government has allowed the duty free importation of capital equipment that includes buses and game viewing vehicles.
- Transport industry
Duty free exemptions have been given to luxury bus operators. Luxury buses may be imported duty free by approved operators.
- Certain other industries
The dairy industry, pharmaceutical industry, vehicle assemblers, and suitcase and bag manufacturers enjoy duty free import of their raw materials.
Trade facilitation
The Zimbabwe Government has established inland Customs Dry Ports to ease congestion at borders. Final clearance of goods will now be done at these dry ports.
Immigrants rebate
At the end of their studies, students who have been on a course or study outside Zimbabwe are entitled to bring back to Zimbabwe personal goods including a vehicle duty free. A ZWL 5,000 limit has been put on the value of the vehicle. This restriction is intended to curb the abuse of the facility by returning students who were being sponsored to import luxury vehicles.
Pauline Mukamba
pmukamba@bdo.co.zw
Maxwell Ngorima