Persons aged 55 years or above are considered as elderly persons for Income Tax purposes and they are eligible to a number of tax concessions. Tax concessions for the elderly provide relief either by reducing the tax payable or removing the tax altogether.

Such concessions are in the form of exemptions and credits granted to elderly persons and are provided for under the Income Tax Act [Chapter 23:06], the Finance Act [Chapter 23:04] and the Capital Gains Tax Act [Chapter 23:01].

Income Tax Act

Exemption on rental income

The rental income accruing to an elderly person, up to a maximum amount of US$3,000 per annum, is exempt from Income Tax. The amount remaining after the exempt portion will be taxed at the normal rates.

Exemption on interest

The first US$3,000 of interest accruing to an elderly person from financial institutions such as savings accounts, fixed term deposits, short term investments and other discounted instruments are exempt from Income Tax. The amount remaining after the exempt portion will be taxed at the normal rates.

Exemption on pension

The whole amount of a pension received by elderly persons from a pension fund or the Consolidated Revenue Fund is exempt from Income Tax.

Exemption on benefit resulting from motor vehicle disposed to elderly person by employer

Where an elderly person, being an employee, receives a motor vehicle either on termination of employment or otherwise, that benefit is exempt from Income Tax. The elderly person receiving the motor vehicle does not pay any tax for that benefit.

Finance Act

Elderly person’s credit

Elderly persons who are in receipt of remuneration are also entitled to an elderly persons’ credit of US$900 per annum. A credit is a sum deducted from the tax chargeable to an individual taxpayer.

Capital Gains Tax Act

Exemption on disposal of property

Where an elderly person disposes of a principal private residence (PPR) (that is his/her main residence), the whole amount received on sale of such property is exempt from capital gains tax. This means that no Capital Gains Tax is payable on the whole amount realised from the sale of the property by an elderly person.

Exemption on disposal of marketable securities

The first US$1,800 that accrues to an elderly person on the sale of any marketable security is exempt from Capital Gains Tax. The amount remaining after the exempt portion will be taxed at the normal rates. Marketable security means any bond, debenture, share or stock that can be sold in a share market.

Temporary Export Permit (TEP) is a customs document issued to exporters of vehicles regardless of their value for personal purposes such as repairs pending re-importation. This document dispenses of the need for exporters to secure exchange control documents such as the CD1 form, which is ordinarily required on exportation of goods with a value exceeding $2000.

Who is eligible for the Temporary Export Permit (TEP)?

• Exporters who intend to export private vehicles for the purpose of holiday and repairs.

What are the conditions of Temporary Export Permit?

• Motor vehicle should be identified to the satisfaction of the Zimra Officer.
• Exporter is required to fill in the TEP document, the full detail of the description and specifications of the vehicle to be exported such as make, model, year, colour, chassis number and engine numbers of the motor vehicle.

What are the relevant documents required?

• Completed Temporary Export Permit in duplicate.
• Passport or travelling document for the traveller;
• Vehicle registration book;
• Authority from the financing bank / company if vehicle is on hire purchase or if owned by employer
• Written authority from the owner signed before the Commissioner of Oath / Police if vehicle is not registered in driver’s name;
• Zimbabwe Police clearance certificate and

What do you benefit from having a Temporary Export Permit?

• On re-importing the vehicle, vehicles on TEP are not liable to customs duties and taxes, thus temporary exported vehicles are exempt from paying duty provided they have not been repaired.
• It is also the basis on which a Zimbabwean registered vehicle can be allowed to be temporarily imported in a foreign country without payment of duty.
• It offers a permanent record at the port of exit for the vehicle (requirement of Vehicle Theft Squad) which can be utilised in investigation cases where vehicles are stolen whilst outside the country.

Procedure that you follow on re-importation

• Importer presents vehicle documents and the TEP to the ZIMRA Officer for the calculation of road access fee and payment thereof.
• Importer completes a declaration form indicating the goods that the importer purchased out of the country, including any repairs made to the vehicle.
• NB: It is at this particular point that you indicate the value of any repairs or any modifications, you maybe rebated if the value of repairs of your vehicle are within the stipulated rebate amount. If the amount is above the rebate value, you will be required to pay duty on excess.
• After meeting the above customs procedures, importer must surrender the TEP to the ZIMRA officer at the search bay while waiting for final clearance and permission to proceed out of the border.

Employers are required to calculate and remit to ZIMRA the correct PAYE. On a monthly basis the PAYE due and the Remittance Advice Form (P2) are submitted.

At year end employers should reconcile their PAYE calculations and ensure the correct PAYE was deducted in preparation for submission of the Employment Income Tax Return in January 2019. Therefore, there is need to note the following compliance requirements.

End of Year Adjustments

• Employers are expected to reconcile their payrolls and ensure the correct tax is collected per employee by end of the year.
• At the end of the year, the employer must make final adjustments to Pay As You Earn (P.A.Y.E.) calculations taking into account the total income, deductions, and credits to which the employee is entitled.
• In the case of shortfalls, the employer is obliged to make good the shortfalls, remit the tax, and recover the shortfalls from employees on the final payroll.  Where there are refunds employers should also refund the employees on the final payroll for the year.
• The employer should then extract the ITF 16 Return and submit to ZIMRA by 30 January 2019.
• The following e-mail addresses should be used to submit the ITF16 Returns:

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Issue of Tax Certificates

• All employees whose remuneration was subject to P.A.Y.E. are entitled to be issued with tax certificates (forms P6) for their records.
• The employer is required to issue forms P6 within 30 days from the end of the relevant year or within 30 days of terminating employment services as the case may be.
• Forms P6 for the employees who are employed by the same employer for the full tax year should be marked F.D.S. on the face.

Submission of Income Tax Returns (FORMS ITF 1)

All those employees who:-

1. Terminate employment during the year of assessment;
2. Change employment during the year;
3. Work part time at the same time being fully employed by another employer;
4. Start employment during the course of the year;
5. Receive pensions;
6. Are executors/ executrix of deceased estates and
7. Are in receipt of income which is not subject to P.A.Y.E.

Are required to submit (FORMS ITF 1).

NB. The Commissioner General will notify all employees who are required to submit ITF 1 return by notice in the press. This notice is usually published in first quarter of each year.

Who should not submit returns of Income Tax Returns?

All those employees whose income consists of employment income only and whose employer was directed to administer P.A.Y.E. under the Final Deduction System (F.D.S.) system and did so during the year concerned, and the employee was in continuous employment with the same employer for the whole year.