Zimra registers SMEs for VAT
The Zimbabwe Revenue Authority (Zimra) has registered 7 982 small-to-medium enterprises for Value Added Tax (VAT) as at April 30, 2017 in a bid to bolster dwindling government revenues.
Zimra board secretary and director for legal and corporate services Florence Jambwa told NewsDay that the tax collector has embarked on an intensive outreach and registration exercise in all provinces of the country to promote the registration of SMEs under the moratorium.
“As at April 30 2017, a total of 7 982 Small-to-Medium Enterprises had registered for VAT under the moratorium, which expires on June 30, 2017,” Jambwa said.
With most SMEs reluctant to register for VAT, due to the massive backdated taxes and penalties that they are likely to incur upon registration, Finance minister Patrick Chinamasa in the 2017 Budget statement proposed to waive the requirement to account for output tax from the deemed date of qualification for registration.
Chinamasa gave the six-month moratorium on VAT registration for SMEs that qualify on account of their gross turnover exceeding the threshold of $60 000 per annum.
This incentive will apply to SMEs whose turnover does not exceed $240 000 per annum to voluntarily register for VAT with Zimra.
Jambwa said the registration of SMEs was expected to boost collections for all revenue heads by at least 10% for the whole year, all things being equal.
In 2016, Zimra missed its targets after collecting $3,46 billion against a target of $3,60 billion.
In the first three months of 2017, Zimra’s gross collections totalled $862,47 million 6% above the target of $812,94 million.
The thrust to register SMEs for VAT, according to Treasury, is geared towards prompting SMEs to transact with private and public sector entities. Corporate suppliers within the value chain must be registered for VAT to enable the established corporates to claim input tax on goods and services supplied by the SMEs.
By dealing with large businesses, SMEs take advantage of existing market opportunities, as well as benefits such as improved quality control and technology and skills transfer.–newsday