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Dumisani Nsingo, Senior Business Reporter
ABOUT 13 000 small to medium enterprises (SMEs) com­plied with a Zim­babwe Rev­enue Author­ity (Zimra) di­rec­tive for them to reg­is­ter for tax pur­poses by June 30.

Gov­ern­ment, through the Min­istry of Fi­nance and Eco­nomic De­vel­op­ment, is­sued a six-month moratorium on penal­ties for non-com­pli­ant small and medium-sized en­ter­prises that were el­i­gi­ble for tax registra­tion be­fore Jan­uary this year.

Zimra head of corporate communications Mr Canisio Mudzimu said all SMEs whose turnover is between $60 000 and $240 000 that failed to make use of the window to register for Value Added Tax (VAT) would be subjected to penalties.

“We received 12 992 new registrants and since the moratorium for registration was valid from 1 January to 30 June all those that failed to register will have their registration being backdated, which means that penalties and interest will be charged,” said Mr Mudzimu.

SMEs reg­is­tered for in­come tax pur­poses with Zimra are el­i­gi­ble for ap­pli­ca­ble de­duc­tions pro­vided for in the In­come Tax Act in re­spect of ex­pen­di­ture re­lated to their op­er­a­tions.

Many SMEs view pay­ing tax as an un­wanted cost to busi­ness rather than a nor­mal busi­ness prac­tice. Taxes ap­pli­ca­ble to SMEs in­clude pre­sump­tive tax, in­come tax, value added tax, pay as you earn and with­hold­ing tax.

Small and Medium Enterprises Association of Zimbabwe executive officer Mr Farai Mutambanengwe said there was still a need to educate SMEs on the importance of complying with tax regulations.

“It’s (registration of SMEs for VAT) a good progression but there is need for education to be done to some because they may not know or understand the merits of registering for VAT. Previously, some didn’t register because they would be charged backlog taxes. Zimra’s change in approach is a welcome development as SMEs took advantage of the moratorium,” he said.

The Government says there are more than 5,7 million busi­nesses op­er­at­ing in the in­for­mal sec­tor.

@DNsingo