Benefits of tax compliance

23 Nov, 2017 - 02:11 0 Views

The Chronicle

Tax laws provide for the charging of additional tax and penalties equal to the defaulted amount and interest, where a client fails to adhere to its provisions.

In some instances, fines, prosecution and imprisonment may be effected depending on the nature of the default.

However, taxpayers can avoid these unnecessary penalties by being tax complaint. Regular audits are usually conducted by ZIMRA to check on compliance and to correct problem areas identified, as well as to educate the clients where necessary.

Costs associated with non-compliance come in various forms such as:
-Time wasting;
-Court cases that may affect the image of the business;
-High collections costs, as well as possible legal fees;
-Extra costs in additional tax and penalties that may negatively affect cash flows.

To avoid such costs, clients should:
-Keep proper records;
-Adhere to due dates for payment of taxes or submission of returns;
-Pay the correct amount of tax;
-Declare the correct amount of taxable income in their tax returns;

Clients should note that benefits of tax compliance are mainly derived from proper record keeping.These benefits include the following:
-The information kept by businesses is used to effectively manage the businesses as well as check and show company performance;
-Business efficiency is also derived from good record keeping;
-When business systems are up to date and properly managed, there is improved decision making;
-Updated records enable a clear assessment of the current affairs of the company;
-Proper records facilitate audits and reduce the time taken by auditors;
Records can be maintained in either manual or automated form. The law requires that all records be kept in English language.

Disclaimer This article was compiled by the Zimbabwe Revenue Authority for information purposes only. ZIMRA shall not accept responsibility for loss or damage arising from use of material in this article and no liability will attach to the Zimbabwe Revenue Authority. To contact ZIMRA: Visit our website : www. Follow us on Twitter: @Zimra_11 Like us on Facebook: Send us an e-mail: [email protected], [email protected], call us (Head Office): 04-758891-5; 790813-4; 781345; 751624; 752731.

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