WITHHOLDING TAX ON TENDERS

Withholding tax on tenders is deducted from all persons who fail to furnish the paying officer with a Tax Clearance Certificate and the paying officer must furnish the payee with a certificate showing the amount so withheld.

The Commissioner shall retain the amount withheld and remitted until the income tax of the payee has been assessed for the year of assessment. The amount so withheld shall be allowed as a credit against the income tax so payable by the taxpayer.

What is the rate and threshold of withholding tax on tenders?

The rate of withholding tax on tenders has been increased from 10% to 30% and the threshold was reviewed upwards to ZWL$500,000.00 or US$ 1,000.00 during the year of assessment effective 1 January 2023.

When is 30% withholding tax on tenders remitted to ZIMRA?

The withholding tax is remitted to ZIMRA in the currency in which the goods and services concerned were purchased on or before the 10^th of the month, following that in which the payment was made. The payment should be accompanied with a schedule showing all names of the persons from which the amount was deducted and attached to the Rev 5 Form.

What are the circumstances where withholding taxes cannot be withheld?

Withholding Tax is not applicable on the following contracts/amounts:

1. Amount paid as an agreement for the settlement of a delictual claim against the State or a statutory corporation
2. Amount paid in terms of an employment contract
3. Amount on a sale effected in any shop in the ordinary course of the business of such shop or any other consumer contract for the sale or supply of goods or services or both in which the seller or supplier is dealing in the course of business and the purchaser is the final user or consumer. This excludes contract for the sale, letting or hire of immovable property.