The Zimbabwe Revenue Authority (Zimra) has advised the business community to declare all sales conducted in foreign currency for the smooth processing of taxes in tendered currency.
Following the Reserve Bank of Zimbabwe (RBZ) announcement in June this year to allow companies to accept payments in foreign currency, a Statutory Instrument 185 of 2020 with provisions of Section 4A of the Finance Act was promulgated and requires tax to be paid in the currency of the transaction.
However, the tax collector has since realized that most business owners are evading tax in foreign currency by not declaring all sales done outside the Zimbabwe dollar.
In a virtual meeting with the press today, Zimra Commissioner General, Faith Mazani warned business community against the malpractice or risk hefty penalties.
“I would want to encourage our business community to be good corporate citizens for the betterment of our economy. Zimra further reminds the business community that tax audits focused on monitoring of tax payments in foreign currency are currently ongoing,” she said.
Foreign currency have become the most sought after medium of exchange for businesses due to the volatility of the local currency and is being used as a stock of value once merchants get hold of it.
However, authorities have warned that non compliance will attract penalties with interest, prosecution and naming and shaming.
Authorities have noted that in order to evade paying tax in foreign currency, it has become rampant for businesses to simply not record transactions in foreign currency or where they are recorded, part or all of the forex tendered is not being declared for tax purposes.
“Some traders have created back offices and banking halls where forex payments are being received but not receipted nor declared on returns,” she added.
It has also been further realised that some businesses have since made stand-alone tills which are not configured to the Zimra fiscalisation system.
Zimra has hence called for consumers to play their part in fighting these business malpractices by whistle blowing and also demanding receipts for transactions in correct currency of transaction.
The development has led to Zimra being disenfranchised a great deal of tax revenue in foreign currency since the RBZ allowed settlement of payments in foreign currency.
