Frequently Asked Questions(FAQs)

• Question
  
  What are the types of taxes that are levied on musicians in Zimbabwe?
  
  Answer
  Musicians, as providers of entertainment service and suppliers of goods in the form of CDs, Cassette sales are considered to be traders in business and are required to pay Income Tax. Like all employers musicians are required to register with ZIMRA within 14 days of becoming an employer. Pay As You Earn should be withheld from remuneration accruing to the musician’s employees and should be remitted to ZIMRA by the 3rd of the following month. Records in respect of remuneration paid should be maintained. Failure to comply with these requirements renders the musician liable for payment of the outstanding PAYE, penalties and interest. The VAT law requires traders engaged in the business of supplying goods (Cassettes and CDs) and or services whose annual turnover exceeds US$60 000 to apply for VAT registration to ZIMRA. Only traders that are registered for VAT are allowed to charge and collect VAT whenever they supply taxable goods or services. Visiting artists are liable for the payment of royalties before the promoter pays any gate takings to the artist. Yes, the current laws are compatible with international best practice and standards. The fiscus is supposed to benefit from the collection of the above mentioned forms of taxes. There are no specific tax concessions / exemptions enjoyed by musicians.
  
  Question
  
  Please furnish us with information pertaining to Corporate Tax.
  
  Answer
  Corporate tax rate for 2009 was 30% plus 3% Aids levy and the tax rate has been reduced to 25% in 2010. Aids levy of 3% remains in place.
  
  Question
  Could you please shed light on how you are charging duty on vehicle imports?
  
  Answer
  Thank you for your request for clarification on rates of duty on the importation of motor vehicles. It is indeed correct that rates of duty on some motor vehicle importations have been reduced from 40% to 25%. However, this only affects vehicles specified in Statutory Instrument 2 of 2010. The affected vehicles include: 1. Passenger motor vehicles of engine capacity not exceeding 1500cc: Duty rate was reduced to 25%. 2. Goods vehicles of a pay load not exceeding 800kg: Duty rate was reduced to 25%. Value Added Tax (VAT) and Surtax remain unchanged at 15%. Please note, however, that as in the past passenger motor vehicles mentioned above which are more than five (5) years old still attract a Surtax of 25%. There were changes introduced in the 2010 National Budget which affect the calculation of VAT. VAT is now calculated on the value for duty purposes (VDP) plus the duty charged. Previously VAT on imported goods was calculated on VDP only which excluded duty. The effect is that it increases the amount of VAT payable. For goods imported by individuals for their own use, the Commissioner General of the Zimbabwe Revenue Authority (ZIMRA) is entitled to reject the declared value of goods being imported and determine an appropriate value in terms of Section 112 of the Customs and Excise Act [Chapter 23:02]. However, this is restricted to situations in which the value of such goods has not been established; has not been declared correctly; or where the declaration does not reflect ‘. . . a bona fide open market sale price between unrelated parties’. For importations of motor vehicles, the declared value is not necessarily accepted. In the event that that the declared value is not accepted, ZIMRA determines the fair market values based on any previous determination or uses any of the valuation methods provided for in Sections 106 to 111A of the Customs and Excise Act. The reduced duty rates are now applicable and the effective date is January 1, 2010.