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Minister Patrick Chinamasa

Senior Business Reporter
SMALL to Medium Enterprises (SMEs) have up to Friday this week to register for Value Added Tax when the six-month moratorium expires.

In his 2017 national budget statement, Finance and Economic Development Minister Patrick Chinamasa, had given unregistered businesses with gross turnover of between $60 000 and $240 000 per year to register for Value Added Tax by 30 June 2017.

The Government considered the SMEs sector as pivotal in achieving economic growth amid reports that over $5.7 billion was circulating in the informal sector.

The informal sector was given a six months moratorium to ensure that they register their businesses without incurring any penalties.

“The moratorium for registration is valid from January 1, 2017 to June 30, 2017 and failure to register will result in the registration being backdated, which means that penalties and interest will be charged,” said Zimra.

As a result of the moratorium, the principal tax, penalties and interest were being waived for the years prior to registration.

“The effective date of registration is the date on which the application is made. This means that the date of registration will not be backdated,” said the authority.

Since the opening of the moratorium in January, over 12 000 SMEs have registered with the Zimbabwe Revenue Authority (Zimra) ahead of the June 30 deadline.

As part of the registration requirements, SMEs need to complete application Form (REV 1) and submit the form to the nearest Zimra office.

The form is available at Zimra offices or can be downloaded from the authority’s website. Businesses seeking registration were also required to attach sales schedules to the application forms, reflecting proof that one meets the VAT registration threshold of $60 000 per year.

The SMEs were also required to attach present stamped bank statements as well as attaching a letter appointing a public officer, in the case of companies.

In 2016, the Government announced it was formalising the SMEs operations to tap into the informal sector following realisation that Zimbabwe’s tax base was shrinking as industries in the formal channels were either closing down or downsizing.

According to a Finscope Micro, Small and Medium Enterprises (SMEs) Survey, 2012, in Zimbabwe there were 2.8 million SME owners employing 2.9 million people, translating to 5.7 million people dependent on the sector, and contributing over 60 percent to the Gross Domestic Product.

@okazunga