1.1 Introduction to Income Tax In Zimbabwe

All persons with taxable income in Zimbabwe must register with the Zimbabwe Revenue Authority (ZIMRA) and obtain a Taxpayer Identification Number (TIN). Registrable taxpayers (as defined by ministerial notice) must apply for registration within 30 days of becoming so entitled[1]. In practice, a person starting a business must register on the e‑portal (Rev.1 form) within one month of trading. New employers must register and withhold PAYE within 14 days of hiring any employee. ZIMRA’s online portal (TaRMS) now handles registration electronically. Non‐residents doing business in Zimbabwe must appoint a local representative when registering[23].

Registered taxpayers must keep adequate records in English. Section 37B requires that books, invoices, statements and related documents be kept for at least six years from the end of the tax year. Failure to maintain records is a criminal offense[24]. (For example, Sec 37B imposes a fine up to Level 7 or 10% of taxable income for recordkeeping breaches[24].) Taxpayers must notify ZIMRA within 14 days of any change in address or cessation of business[25]. These registration and record-keeping duties apply equally to residents and non‐residents with Zimbabwean taxable activities, though non‐residents file returns through their local representative.

2. Filing Requirements and Deadlines

2.1 Filing Obligations by Category

ZIMRA issues an annual public notice (Sec 37) requiring returns from all persons in prescribed classes. In practice, there are three main categories of income and corresponding returns[3][2]:

• Employment Income (ITF1) – Individuals receiving employment income not covered solely by PAYE (e.g. those who worked for less than a full year, changed jobs, or had multiple employers) must file form ITF1 by 30 April each year[3][2]. (Employed persons paid by a single employer for the entire year generally have their tax finalised by monthly PAYE and are not required to file ITF1.)
• Individual Trade/Investment Income (ITF1A) – Zimbabwe-resident individuals earning income from business, investments or a profession (outside salaried PAYE) file ITF1A by 30 April (or by 4 months after year-end if using a substituted accounting period).

• Company/Trust Income (ITF12/ITF12C) – All companies, trusts and other entities file the annual ITF12 return. Most large taxpayers (e.g. VAT Category C, banks, insurers) file by self-assessment: such taxpayers must submit ITF12C (self-assessment return) by 30 April (4 months after year-end)[26][2]. Other entities file ITF12 within 30 days of ZIMRA’s notice (often 30 days from 31 Dec)[27]. Firms with non-calendar fiscal years file within 4 months after their year-end (unless an extension is granted)[28].

• Transfer Pricing (ITF12C2) – Multinationals and specified groups must file an ITF12C2 transfer pricing disclosure along with ITF12C by 30 April[2].

• Capital Gains (CGT1) – Individuals and companies disposing of assets report gains on CGT1 by 30 April[2].
• Employees’ Annual Return (ITF16) – Employers submit annual P9 returns (ITF16) within 30 days after year-end[10], summarizing all PAYE withheld. Monthly PAYE is remitted on form P2 by the 10th of the following month[9].

Table 1 below summarises key filing obligations and deadlines (assuming a calendar year 31 Dec year-end).

Return/Form	Applies To	Due Date	Legal Basis / Note
ITF1	Individuals (employment income)	30 April (year+1)	Sec 37, official notice[3]
ITF1A	Individuals (trade/investment income)	30 April (year+1) / 4 months after FY end	Sec 37A (self-assessment)
ITF12 (or ITF12C)	Companies, trusts, self-employed	30 April (year+1) / 4 months after FY end / 30 days from notice[26][27]	See Sec 37A (self-assessment)[4]
ITF12C2 (TP return)	Transfer pricing transactions	30 April (year+1)	Public notice (Sec 98B/35th Sch)
ITF16 (P9)	Employers (annual PAYE summary)	30 days after employer’s year-end[10]	Schedule to Act[10]
P2 (Monthly PAYE remittance)	Employers (monthly PAYE withholding)	10th of following month[9]	13th Schedule
CGT1	Capital Gains (individuals/companies)	30 April (year+1)	Sec 37 notice (as above)

Returns must be filed in the prescribed form, duly signed under penalty of perjury. ZIMRA strongly encourages e‑filing via the taxpayer portal (TaRMS/E‑services/E‑Taxes) to improve efficiency. (The new E‑Taxes portal launched in 2024 streamlines return submission, status checks and compliance certificates[22].) All taxpayers – including those with foreign‐currency income – must file by the due dates. Under Sec 37AA, those earning partly in foreign currency must submit separate returns for foreign vs. local currency income, using official exchange‐rate rules to convert[29].

3. Tax Assessments (Normal, Additional, Estimated)

3.1 Normal (Standard) Assessments

Once returns are submitted, the Commissioner issues assessments under Section 51. Any taxpayer-supplied self-assessment (under Sec 37A) is deemed accepted unless disputed[5]. Otherwise, ZIMRA reviews the return and notifies the taxpayer of taxable income and tax due. By law, the Notice of Assessment must be delivered with the tax liability and a 30-day objection period[16]. (Sec 51 specifically requires notice of tax payable and informs the taxpayer of their right to object within 30 days[16].) Failure to issue notice in time can invalidate an assessment.

As a practical matter, a normal assessment is one based on the taxpayer’s filed return (or ZIMRA’s calculation). If ZIMRA has any questions during audit, it may adjust the assessment (Sec 47, below). Once served, an assessment is final unless successfully challenged by objection or appeal.

3.2 Additional Assessments and Estimated Assessments

If a taxpayer fails to file a return or files an incomplete/incorrect return, ZIMRA may impose estimated assessments under Sec 45 and additional tax under Sec 46.

• Estimated Assessments (Sec 45): If no return is filed or ZIMRA has reason to doubt the return, the Commissioner may estimate the taxpayer’s income (based on best information) and determine tax accordingly[6]. This protects revenue when a taxpayer is uncooperative or missing. For example, if a company stops trading or absconds, ZIMRA can make an estimated assessment on known sources.

• Additional Tax (Sec 46): Beyond estimation, Sec 46 imposes penalties (in effect a special “additional tax”) for defaults or omissions. For instance, sub‐section (1) levies additional tax where a taxpayer “fails to make a return” or “omits income or overclaims deductions”[7][8]. The additional tax equals the greater of (a) 10% of the tax or (b) the full tax due, essentially doubling the liability in most cases[7]. Subsequent offenses can double it again[30]. In practice, this means that knowingly understating income or failing to file can lead to very large penalties.

• Additional Assessments (Sec 47): Even after a normal assessment, ZIMRA can re-open it if new information emerges. Section 47 allows reassessment for income omitted or unlawfully allowed deductions. The Commissioner can issue an amended assessment on the omitted amounts[31]. However, Sec 47 is subject to strict time limits: generally no reassessment beyond 6 years from year-end, unless fraud, misrepresentation or willful non-disclosure is proven. (This was confirmed in TL v ZIMRA, where the High Court held that ZIMRA may only re-open beyond 6 years if fraud or non-disclosure is shown[32].)

Thus, normal assessments are final unless reversed by valid objection/appeal. Otherwise, ZIMRA will resort to estimated or additional assessments to protect revenue. Taxpayers facing reassessment or enforcement should note that TL v ZIMRA emphasizes ZIMRA’s burden to prove serious default before reopening old returns[32].

4. Payments and Provisional Tax

Income tax liabilities are payable in ZWL to ZIMRA’s single bank account, unless otherwise directed. Sec 71 empowers the Commissioner-General to set payment dates and places. In practice:

• Current Year Tax: After the assessment is finalized (self-assessment or ZIMRA assessment), any tax due is payable immediately or by the prescribed payment date (often 30 days after notice).

• Employees’ Tax: Employers must withhold PAYE monthly and remit on or before the 10th of the following month[9]. Annual employer returns (P9/ITF16) summarise these payments and must be filed within 30 days of year-end[10].

• Provisional Tax (Sec 72–73): Provisional tax applies to individuals and companies not fully covered by PAYE (i.e. self-employed, companies, trusts). Under Sec 72, provisional tax is paid in four installments during the tax year based on the taxpayer’s own income estimates[11]. The standard schedule is: 10% by 25 March, 25% by 25 June, 30% by 25 September, and 35% by 20 December (these percentages may vary slightly by tax year)[11]. (The 2025 Notice cited these exact instalments. A slight underpayment (up to 10% error) can be waived[33].) Taxpayers file a provisional return with their first instalment (Sec 72(3)), estimating the year’s taxable income. After year-end they either obtain a self-assessment (Sec 37A) or file their final return (ITF12C). If instalments fall short, interest and additional tax apply to the deficit. ZIMRA publishes detailed guidelines on PT and waivers[33].

Table 2: Provisional Tax Payment Schedule (Section 72)

Installment	% of Estimated Tax	Due Date	Penalty for Default
1st	10%	25 March	Default surcharge after due date
2nd	25%	25 June	+ interest (SI-fixed rate)
3rd	30%	25 Sept	+ interest
4th (Balancing)	35%	20 Dec	+ interest

The Commissioner may waive interest on an underpaid instalment if it was a minor error (<10%) or due to administrative issues[33]. All instalments count as tax paid; any excess is refunded or credited.

5. Audits and Information‐Gathering Powers of ZIMRA

ZIMRA wields extensive audit powers under the Income Tax Act to enforce compliance. Key provisions include:

• Information Powers (Sec 39–40, 60–61): Section 39 authorizes ZIMRA to require traders, employers, or others to furnish further returns and information (e.g. details of employee remuneration, shareholdings, loans, etc.)[12]. Public officers and institutions must produce public records. Section 40 specifically compels any government or financial institution to allow ZIMRA free access to registers, books, accounts or any documents[13]. Banking secrecy is overridden: evidence from any bank (including Reserve Bank or spouses’ accounts) relating to a taxpayer can be legally admitted[13].

• Objections to Information Demands: ZIMRA can also require information from third parties and foreign tax authorities (exchange of information treaties exist). Under Sec 60, the Commissioner may require any person to give information about money or assets related to a taxpayer.

• Tax Audits and Investigations: Operationally, ZIMRA conducts desk audits and field audits. It may issue a notice to produce books or to attend interviews. ZIMRA can also examine Value Added Tax (VAT) records, and in 2023–25 has implemented electronic invoice matching (fiscalization via FDMS). For income tax audits, irregularities such as unexplained income or non-filing triggers inquiries[12]. In recent years, ZIMRA has emphasized data analytics: for example, requiring submitters of electronic transfer taxes to report transaction data.

• Enforcement Actions: If a taxpayer does not comply, Sec 59 allows ZIMRA to pursue remedies against the property of an agent or trustee as if it were against the taxpayer[34]. As seen in JK Motors v ZIMRA (2021), ZIMRA even garnishee’s taxpayers’ bank accounts; however the High Court held that such garnishees must await the finalization of appeals or objections – the court set aside a premature garnishee on JK Motors’ accounts[35].

These powers ensure ZIMRA can gather any necessary information during an audit. In practice, ZIMRA auditors must follow the procedures: they generally issue a statutory notice for books, then assess, and give notices of proposed adjustments with reasons. Audited taxpayers have rights to copies of documents submitted under audit.

6. Penalties, Interest, and Recovery Mechanisms

6.1 Penalties and Additional Tax

The Act imposes a variety of penalties for non-compliance:

• Failure to Register (Sec 25C): A taxpayer who does not register when required faces a fixed penalty of US$100 (or ZW$ equivalent) plus an additional US$100 for every month (or part) after a 90-day grace period[36].

• Record-keeping Offenses (Sec 37B & Sec 82): Sec 37B (above) penalizes failure to maintain books (fine up to Level 7 or 10% of income)[24]. Separately, Sec 82 criminalizes willful failure to comply with a Commissioner’s notice or failure to keep proper accounts. A conviction carries fine up to Level 7 or one year’s imprisonment[37].

• False/Incorrect Returns (Secs 81, 84, 85): Willfully making incorrect statements or omitting income is an offense. If a taxpayer “wilfully fails to disclose income” on a return, they face up to Level 7 fine or one year’s jail[38]. Section 85 similarly penalizes any false statement in a return (fine ≤ Level 7 or one year)[15]. General non-disclosure or hindrance (Sec 81) carries up to Level 7 and 3 months jail[14].

• Additional Tax (Sec 46): In addition to criminal penalties, Sec 46 levies civil “additional tax” for defaults. For example, failing to file a return incurs additional tax equal to the greater of (i) 10% of the correct tax or (ii) the full tax due[7]. Omitting income or incorrect deductions similarly incurs additional tax equal to the tax on the omitted amount[8]. These sums are recoverable as tax.

Table 3 summarizes some key penalties:

Offense (Section)	Penalty
No registration within 30 days (25C)	US$100 + US$100 per 30 days after 90 days[36]
Failure to file return (general, 81(1)(a))	Fine ≤ Level 7 (≈US$5,000) or 3 months jail[14]
False/Incorrect return (84–85)	Fine ≤ Level 7 or 1 year jail[38][15]
Wilful non-compliance / obstructions (82)	Fine ≤ Level 7 or 1 year jail[37]
Failure to keep records (37B)	Fine ≤ Level 7 or 10% of income[24]
Default surcharge (Sec 46)	Additional tax (= max[tax×10%, tax]) on amount in default[7]

In practice, these penalties are serious. However, ZIMRA can and does exercise discretion: minor or first-time errors often lead to demands for the unpaid tax plus interest rather than criminal prosecution.

6.2 Interest on Late Payments and Refunds

By law, interest accrues on late tax payments and unpaid arrears at a rate set by Statutory Instrument. Generally, unpaid tax attracts interest from the due date to payment. For example, unpaid instalments of provisional tax incur interest until settled (see Sec 72(10) on surcharges). Conversely, overpaid tax earns interest: if a refund is not paid within 60 days of claim or assessment, ZIMRA must pay interest on the excess tax[39].

In special cases, the Commissioner-General may remit interest or penalty: e.g. under Sec 72(11), if a taxpayer underestimates provisional tax by less than 10%, the Commissioner may waive the interest[33]. This incentive encourages honest self-assessment.

6.3 Recovery of Tax

Unpaid taxes (including additional tax) are recoverable by ZIMRA as a civil debt. Section 77 empowers the Commissioner to recover taxes through legal proceedings. Notably, Section 78 allows summary judgment on assessments; garnishee orders against bank accounts or wages can be obtained once all appeals are exhausted. For example, in JK Motors v ZIMRA, ZIMRA attempted to garnish the taxpayer’s bank accounts to recover unpaid tax, but the High Court temporarily suspended the garnishee order as the dispute was still under adjudication[35]. ZIMRA also leverages tax clearance certificates and contract withholding (Sec 80, 80A) as administrative enforcement.

7. Objections and Appeals

A taxpayer wishing to dispute an assessment must formally object in writing, usually within 30 days of receiving the assessment[16]. Section 51(3) requires the assessment notice to specify this objection window. The objection should explain the grounds (e.g. factual errors). During the objection, the taxpayer is generally required to pay the disputed tax (though security arrangements may be made).

If unsatisfied with the objection result, the taxpayer can appeal to the Special Court for Income Tax Matters (a division of the High Court) and ultimately to the Supreme Court (Secs 64–66)[17]. Burden of proof in appeals for claimed exemptions or deductions rests on the taxpayer (Sec 63). Typically, stay of tax during appeals is limited: taxpayers often must deposit the tax due or obtain a judge’s permission to defer payment pending appeal.

Procedurally, if the Taxpayer wins, any excess tax paid is refunded with interest. If ZIMRA prevails, the objection is disallowed and the taxpayer owes tax plus any applicable penalties or interest. TL v ZIMRA illustrates the importance of technical interpretation: the court there re-characterized a management fee deduction as a technical service fee, thereby reducing disallowed tax[40].

8. Representatives and Agents (Secs 53–59)

The Act defines representative taxpayers for various entities (Sec 53). For example, every company must appoint a public officer (a senior official) to act as its representative taxpayer[41]. This person is responsible for filing the entity’s returns and paying its tax. Section 54 makes the representative “subject in all respects to the same duties, responsibilities and liabilities” as if he were the beneficial recipient of the income[18]. In practice, the company’s tax is assessed on the public officer, but the company as principal is ultimately liable.

Importantly, the representative has rights and duties: Section 55 grants him a right of indemnity from the company – any tax he pays on its behalf can be recovered out of company funds[42]. Section 56 makes the representative personally liable if, while tax remains unpaid, he alienates or dissipates the income out of which the tax should have been paid[19]. In essence, company directors (public officers) must safeguard corporate assets until taxes are paid. Section 59 further allows ZIMRA to pursue taxes from assets held by an agent or trustee of the taxpayer as if they were the taxpayer’s own[34].

For non-residents, the law permits ZIMRA to designate a representative or agent to receive assessments and notices on the taxpayer’s behalf (Sec 58). If a taxpayer or agent fails to comply with a ZIMRA request, Sec 59 ensures ZIMRA can treat the agent’s actions as if by the taxpayer, streamlining enforcement against nominees[34].

In summary, the Income Tax Act formally binds representatives to the taxpayer’s liabilities, ensuring that corporate and fiduciary structures cannot be used to evade tax. Sabelo Nare notes that these provisions reinforce the Commissioner’s power: the representative steps into the taxpayer’s shoes for compliance purposes (Nare, Tax Law & Practice, §5.x).

9. IMTT and Digital Compliance (E-filing, E-audit)

9.1 Intermediated Money Transfer Tax (IMTT)

A recent innovation is the Intermediated Money Transfer Tax. Introduced in 2002 (Finance Act 15/2002), Sec 36G charges a 2% tax on electronic fund transfers (other than cheques) through financial institutions[20]. The Thirtieth Schedule elaborates that any bank or mobile money operator mediating a transfer between parties must pay 2% IMTT on the transaction[21]. For example, if A sends funds to B via bank transfer, the bank pays ZIMRA 2% of the amount. Banks may then recover that tax from their customers (by agreement)[21]. The IMTT is not deductible for income tax purposes (to prevent cascading deductions). (Note: proposals in recent Finance Bills aim to slightly adjust IMTT rates – e.g. lowering the local currency rate to 1.5% while keeping foreign currency at 2% – but USD transfers remain at 2%[43].)

9.2 E‑filing and Digital Systems

ZIMRA has rapidly expanded its digital tax infrastructure. The current portal (TaRMS/MyTax) allows electronic filing of all major returns. In 2024 ZIMRA launched E‑Taxes, a parallel online filing platform, to ease technical issues on the old system[22]. Through these systems, taxpayers can submit ITF returns, payroll taxes, provisional declarations and even file objections online.

On the audit side, ZIMRA is moving toward e‑audits. For VAT, ZIMRA’s Fiscalisation Data Management System (FDMS) now receives real‐time invoice data. As of mid-2025, all invoices (even for non-VAT vendors) must carry QR codes, and sellers must submit buyer details to ZIMRA’s FDMS[44][45]. TaRMS has been integrated with the FDMS so that input VAT credit schedules and audit trails are generated automatically[44]. Although this primarily targets VAT, the data gathered also aids income tax audits (e.g. cross-checking sales records). In short, ZIMRA is using technology to improve compliance: mandatory e‑invoicing, API connections, and online records reduce manual errors and allow remote verification.

Finally, Sec 80A (added in 2022) requires vendors to present a valid tax clearance certificate (TCC) to register for certain licenses or tenders. This reinforces compliance by linking tax status to business privileges.

10. Recommendations and Conclusion

Income tax administration in Zimbabwe combines detailed statutory requirements with expanding digital tools. To improve compliance and fairness, the following are recommended:

• Enhanced Taxpayer Education: Many penalties arise from ignorance (e.g. missing deadlines). ZIMRA should continue to issue clear public notices and guides on filing (as it does annually), including updated instructions for e‑filing. Early reminders and helpdesks can reduce inadvertent defaults.
• Streamlining Procedures: Simplify forms where possible. For example, consider merging overlapping returns (e.g. ITF1A and ITF12C for small businesses) or allowing more use of estimated band returns for micro-enterprises.
• Digital Compliance Support: Provide training and support for small taxpayers to adopt e‑invoicing and e‑filing. Ensure ZIMRA’s e‑portal is user-friendly and stable. Continue integrating systems (TaRMS, FDMS, banks) to minimize manual data entry.
• Fair Enforcement: While strict laws (Secs 46–85) are necessary deterrents, ZIMRA should apply penalties proportionately. For first-time or technical errors, prompt payment demands with interest (rather than criminal charges) may be more cost-effective.
• Timely Audits Resolution: To avoid disputes like JK Motors, ZIMRA should not seize assets or bank accounts until objections/appeals are exhausted, unless there is risk of asset flight.
• Legislative Updates: As the 2025 Finance Bill becomes law, align procedures with new provisions (e.g. any changes to IMTT or digital reporting). Engage stakeholders (tax professionals, businesses) in drafting regulations to ensure smooth transitions.

In conclusion, Zimbabwe’s Income Tax Act provides a comprehensive framework for administration. Legal provisions cover every stage – from registration (Sec 25B) and filing (Secs 37–39), through assessment (Secs 45–51), to collection (Secs 71–73) and enforcement (Secs 81–85). The authorities’ challenge is operationalizing these rules efficiently. The trend toward e‑government (online portals, e‑invoices) promises to reduce compliance costs and improve revenue collection. By following clear procedures and applying the law consistently (as elucidated by courts in JK Motors and TL v ZIMRA), ZIMRA and taxpayers can work towards a fair, transparent tax system.

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