ZIMBABWE

REVENUE AUTHORITY

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TAX COMPLIANCE FOR MEDICAL

PRACTITIONERS

16 APRIL 2016

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PRESENTED

BY

E. MAUNDU

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 VISION
“To be a beacon of excellence in the provision of
fiscal services and facilitation of trade and travel.”

MISSION

“To promote economic development through

efficient revenue generation, collection and trade
facilitation.” 5
 VALUES

Integrity

Transparency

Fairness
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 OBLIGATIONS

BASELINE OBLIGATIONS

•Voluntary compliance to all tax laws and regulations.

•Integrity – zero tolerance to corruption.

•Patriotism.
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 TAX OBLIGATIONS
Tax obligations relate to compliance requirements
under the following Acts:
•Income Tax Act (Chapter 23:06)
• Corporate/Company Tax
• Employment Tax (PAYE)
• Withholding Taxes
• Presumptive Tax
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•Value Added Tax Act (Chapter 23:12)

•Capital Gains Tax Act (Chapter 23:01)

•Customs and Excise Act (Chapter 23:02)

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 WHY PAY TAX?

To enable government to provide public goods

and services – e.g.

•Maintenance of:
-Roads, schools, hospitals, clinics etc.
•National security:
-Police force, Army, Prison service
•Provision of social services: e.g.
-Salaries for Doctors, nurses, teachers etc. 10
 NATURE OF INCOME FOR DOCTORS

Income includes :
•Trade income (practising doctors)
•Investment Income (rental income, dividends,
interest etc.)
•Employment Income (Doctors on payroll)
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 TAX OBLIGATIONS FOR DOCTORS

• Income Tax (Individual Doctors and Companies)

• Pay As You Earn (PAYE)-levied on employees
including working directors

• Value Added Tax (VAT)-levied on taxable supplies

• Withholding Tax-levied on non compliant tax

payers without an ITF 263. 12
 TAX OBLIGATIONS Contd’

• INCOME TAX

• Doctors practising as individuals are liable to register for income tax

in their individual capacity.

• Doctors may also be employed by a company in which case the

company is liable for income tax and their monthly salaries are
subject to PAYE
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 INCOME TAX

Provisional payment of Income Tax is paid

according to QPDs and is done on ITF 12 B as
follows:

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 Pay As You Earn (PAYE)

• Every employer is required to withhold

employees' tax (PAYE), an amount which is
determined in accordance with the Tax Tables
relating to that year of assessment.
• Employees include working directors or directors
who receive other benefits over and above the
board fees.

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 PAYE

• The due date for remittance of PAYE is on or before the

10th of the following month and such remittance should
be accompanied by a return (Form P2.)
• Tax tables are published every year of assessment.
• They have daily, weekly, fortnightly, monthly and annual
rates.
• These can be obtained from any ZIMRA office or from the
website i.e. www.zimra.co.zw
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 PAYE
Remuneration Includes:
•Salary, wage, bonus, cash in lieu of leave

•Leave pay, allowance, overtime pay

•Gratuity, commission, fee, pension

•Other incomes for services rendered to an employer by an employee

•Advantage or benefit from employment

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 PAYE
Employee who has worked for the whole year and whose
PAYE is calculated using the Final Deduction System
does not submit returns.
The following cases are non- FDS and individual
employees are required to submit ITF 1 returns for
assessment of final tax:
•those who left employment during the course of the
year,
•received income from more than one employer,
•or changed employers during the course of the year. 18
 PAY AS YOU EARN Contd.
Form ITF16
•Every registered employer is required to submit
an annual return (ITF 16) of all persons employed
by him detailing the salaries, wages, allowances,
benefits and pension deductions for each person
employed.
•The ITF16 should be submitted within 30 days
after the end of the year of assessment and can be
submitted electronically.
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 VALUE ADDED TAX (VAT)
VAT REGISTRATION
•The threshold for registering for VAT is $60 000
over a period of twelve months.
•Supply of medical services as defined in the VAT
Act is an exempt supply.
•Doctors who deal exclusively in medical services
as defined are not liable to register for VAT.
•Any other activities not falling under medical
services are standard rated, e.g.. Letting out of
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commercial properties.
 WITHHOLDING TAXES
• In terms of Section 80 of the Income Tax Act
(Chapter: 23:06), a 10% 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
unless a payee furnishes the paying officer with a Tax
Clearance Certificate.(ITF 263).
• Any person who enters into a contract (whether for
goods or services) of $1000 or more involving a single
transaction or multiple transactions should comply
with this legal requirement.
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 WITHHOLDING TAXES
• Medical Aid Societies are required to withhold
10% on all payments to all service providers like
doctors without a valid Tax Clearance Certificate
ITF 263 at the time of payment.
• The payer (medical aid society) is required to
issue a Withholding Tax Certificate showing
details of the payee and amount withheld.
• Failure to withhold renders the payer liable for
the full amount plus penalty and there is no
recourse from the taxpayer whom you failed to
withhold from. 22
 WITHHOLDING TAXES Contd:

• The tax withheld and a fully completed return (REV 5) is

due on or before the 10th of the month following that of
withholding.
• NB. Attach a schedule of clients whom you have withheld
the withholding tax showing the relevant details.
• All payments after the due dates attracts penalty and
interest.

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 TAX CLEARANCE CERTIFICATE

• A Tax Clearance Certificate [ITF 263] is a document issued

by ZIMRA to clients who are up to date with all their tax
obligations.
• Complaint clients may also receive their ITF 263 through
their e-mails if the e-mail is updated with ZIMRA.
• The Tax Clearance Certificate is issued on an annual basis.

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EXEMPTIONS FROM WITHHOLDING TAX

a) Payment under contract of employment.

b) Sale in any shop in ordinary course of

business in which case the seller is in
business and the buyer is not.
c) Payment to the state .

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 .

Paying tax dignifies a nation

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Thank you
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