10% Withholding Tax

This type of tax is withheld when the supplier does not have a valid Tax Clearance
Certificate (ITF263). Before a payment is made I check whether the supplier has this
certificate and also check the expiry date on the certificate to ensure it covers the current
period. This tax is also withheld if the supplier has supplied goods or services worth more
than $1000 and does not have the certificate. The taxes collected are paid to Zimbabwe
Revenue Authority (ZIMRA) on the 10th day of the following month.

There is a supplier called Re-do Enterprises (Pvt) Ltd was given an order on the 19 th of
October 2017 to do tiling in the offices. Upon realizing that its tax clearance has expired he
back dated the invoice to the 12th of April 2017 to avoid being paid less 10% on his invoice
value as the date on the invoice the company had a valid tax clearance. The invoice value is
$1650 and I then paid the supplier $1485 ($1650-$165). By this I saved the company from
paying penalties to ZIMRA for not deducting withholding tax on this supplier.

Payment Preparations
Before a payment to the supplier is made, I first check the all the documents given to me by
our stores department. I look for a purchase requisition from the end user department, a
purchase order and goods received note (GRN) and compare the name of the company on
these two documents with the company name on the invoice and the goods delivery note to
ensure they are the same. Also I check the items and quantities ordered and received and
the price on all documents (Order, GRN and Invoice) to ensure they match. This saves the
client from paying for unordered goods or paying for goods that were not delivered.