Zimra Tax Hike Triggers Uproar

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By Bulawayo Correspondent

THE Zimbabwe Revenue Authority (ZIMRA) has increased withholding tax from 10 to 30%, prompting an outcry from businesspeople.

The hike implies that suppliers who fail to provide tax clearance certificates will now lose 30% of their payment following the introduction of the withholding tax effective January 1.

Businesspeople who spoke to said most suppliers are likely to lose almost a 3rd of their payments because they are facing challenges in obtaining the tax clearance certificate.

“Zimra should have consulted all stakeholders before coming up with this new exorbitant tax regime. Zimra encourages businesses to sort out their tax papers before the start of the year, but the problem is that their online system is always down. As a result, most people have been unable to update their returns,” a trader who supplies chemicals said.

Another trader said the new tax will fuel corruption as suppliers will be forced to pay bribes to get the tax clearance certificates.

“As I speak, some large businesses have already started deducting the 30% for those suppliers who do not have the tax clearance certificates.  Because we are in January and a lot people are broke, they are forced to pay bribes to Zimra officials in order to get the tax clearance certificates,” said the trader.

A businessman who is into beverages said the tax increment has already affected the prices of goods and services.

“We have a lot of informal traders who are dealing with big formal businesses, yet they do not have tax clearance certificates. These small businesses will lose nothing if 30% is deducted because they know they will recoup their expenses by simply increasing the prices of their services or commodities,” said the businessman.