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In terms of Section 80 of the Income Tax Act [Chapter: 23:06], a 10 percent Withholding Tax is deductible from all amounts payable to all persons who enter into contracts with the State or a statutory body, a quasi-government institution and taxpayers who are registered with the Zimbabwe Revenue Authority (ZIMRA) except in circumstances where the payee (one who receives payment) furnishes the paying officer with a tax clearance certificate.

Who deducts 10 percent withholding tax on tenders?

Any person who enters into a contract (whether for goods or services) of US$1,000 and more involving a single transaction or multiple transactions should comply with this legal requirement.

When is 10 percent Withholding Tax remitted to ZIMRA?

The amount withheld should be remitted to the Commissioner General on or before the 10th day of the month following that in which the payment was made. The payment should be accompanied with a schedule showing all names of the persons from whom the 10 percent was deducted and attached to the prescribed form (Rev 5 Form) and submitted to ZIMRA.

Responsibilities of a Paying Officer

Any paying officer who has withheld any amount should furnish the payee concerned with a certificate in a form approved by the Commissioner General of ZIMRA, and should clearly show the amount withheld.

Any person who fails to deduct the 10 percent Withholding Tax will be personally liable for the payment of the amount due and a penalty equivalent to that amount is chargeable. It is important to note that the Income Tax Act does not provide for the recovery of Withholding Taxes not deducted from the payee by the paying officer.

Which transactions are exempt from the 10 percent withholding tax?

l Amounts paid in terms of an employment contract.

l Sales effected in any shop in the ordinary course of the business of the shop. This caters for sales by retailers or wholesalers to consumers.

l An agreement for the settlement of a delictual claim against the State or a Statutory Corporation.

l Payments for the supply of farm produce and livestock by farmers.

Important points to note

l It is not against the law for traders to do business with suppliers who do not have a valid tax clearance certificate. The law requires traders to withhold and remit to ZIMRA 10 percent Withholding Tax from the amounts due to such suppliers.

l No fee is charged for the issuance of the tax clearance certificate. Any incidents of people purporting to be ZIMRA officers and charging fees for the issuance of tax clearance certificates should be reported to the Police or to ZIMRA.

l Where in doubt as to the validity and authenticity of a tax clearance certificate produced by a supplier, our valued clients are urged to check – with a barcode reader- the authenticity of such a certificate or check on the list of suppliers issued with tax clearance certificates posted on the ZIMRA website and updated periodically. If still in doubt, the authenticity of such a certificate can also be checked with ZIMRA before the supplier is paid.

l 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

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