‘Trade in forex, pay tax in forex’

The Zimbabwe Revenue Authority has directed businesses that are trading in multi-currencies to remit taxes in the same currency in which the goods have been sold.

“Zimbabwe Revenue Authority has noticed that there are businesses that are trading, withholding and collecting Value Added Tax, Pay As You Earn, Capital Gains Tax and other taxes in multi-currencies,” said the authority in a statement.

“Following this observation, Zimra has found it necessary to clarify that these businesses should remit taxes in the specific currencies in which they collect them without any conversion to RTGS, bond notes, local point of sale and mobile money.”

A number of businesses, especially pharmacies and the bilsing materials industry, are demanding payment in forex.

Some, however, trade the multi-currencies they get on the parallel market and then settle their tax and other obligations using RTGS and other electronic systems, making hefty profits in the process.

Government has urged Zimra to tighten its revenue collection mechanisms to plug loopholes that have been abused by some unscrupulous businesses.

Improved revenue collection is expected to boost Government coffers and in turn funding to critical sectors such as social services and infrastructure development. Zimra is owed over $2 billion in taxes by individuals and organisations.