REMARKS BY THE ZIMRA COMMISSIONER GENERAL, Ms FAITH MAZANI,

DURING THE VIRTUAL Domestic Resource Mobilisation: Forex Business Income Subject to Tax in Forex

20 AUGUST 2020,

HARARE

 SALUTATIONS

• Director of Ceremonies;
• The Reserve Bank of Zimbabwe Governor – Dr John P. Mangudya;
• Government officials here present;
• Members of the ZIMRA Management and Staff;
• Our esteemed journalists;
• Distinguished and Invited Guests;
• Ladies and Gentlemen;

1. INTRODUCTION

• I want to welcome you to this Virtual Press Conference, which ZIMRA is hosting jointly with the Reserve Bank of Zimbabwe.
• As you are all aware, on 17 June 2020, the Reserve Bank Governor announced the dual pricing system, wherein businesses can now accept payments in foreign currency.
• The announcement was followed by the gazetting of Statutory Instrument 185 of 2020 as the Exchange Control (Exclusive Use of Zimbabwe Dollar for Domestic Transactions) (Amendment) Regulations, 2020 (No. 3).
• Statutory Instrument 185 of 2020 was aligned with the provisions of Section 4A of the Finance Act which requires that tax be paid in the currency of transaction.
• In line with SI 185 of 2020, ZIMRA issued a Public Notice No. 40 of 2020 addressing certain business malpractices.
• Among the observations made, ZIMRA noted that:

1. Some businesses are not recording transactions being tendered for in foreign currency.
2. Where transactions have been recorded, part or all the foreign currency tendered is not being declared for tax purposes.

• Transactions in foreign currency are being written in manual registers.

1. Operators are receiving foreign currency from their customers and issuing them RTGS receipts.
2. Foreign currency tendered is not being banked.
3. Parallel manual invoicing is being used for recording transactions involving foreign currency, and such invoices are not declared for tax purposes.

• There are stand-alone tills, which are not configured to the ZIMRA fiscalisation system.
• Some traders have created back offices and banking halls where forex payments are being received but not receipted nor declared on returns.

1. Offline separate systems are being kept for transactions involving foreign currency.

• Some of the practices above are a direct violation of the provisions of section 4A of the Finance Act and section 38 (6) of the VAT Act.
• We have therefore gathered today to emphasize on the need for business to:

1. ensure that in all instances documents recording sales (Invoices, Tax Invoices, Till Slips, Receipts or other documents recording sales) are issued to the customers.
2. Fiscalised registered operators are required to produce fiscalised documents.

• Where a sale is made in Zimbabwe dollars, the invoices/till slips/receipts recording the sale must be issued in Zimbabwe dollars.

1. Where a sale is made in foreign currency, the invoices/till slips/receipts recording the sale must be issued in foreign currency.
2. Where a sale is made in parts of Zimbabwe dollars and foreign currency the invoices/till slips/receipts must reflect such currency details.
3. On areas of non-compliance clients are encouraged to come forward and make voluntary disclosures

• ZIMRA further encourages members of the public to:

1. Insist on being issued invoices, tax invoices, receipts for business transactions done reflecting the correct currency of transaction.
2. Where sellers issue discounts to their customers in either ZWL$ or foreign currency, they must issue credit and or debit notes to correctly record the changes in currency of trade.

• Report any act that contravenes the Tax provisions.

1. Utilize our whistle blowing facility where the identity of the informer is kept in strict confidentiality.

• 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. Any detected noncompliance will be sanctioned through the following as provided in the law:

• Charging of penalties and interest
• Prosecution
• Naming and shaming non-compliant sectors etc.

Our valued clients are therefore encouraged to avoid attracting the above sanctions and do the honorable by correctly declaring all their tax in full, on time all the time,

With these few words,

I thank you