OK Zimbabwe flags ‘excessive’ tax regime

OK flags ‘excessive’ tax regime
OK flags ‘excessive’ tax regime

OK said inflation-adjusted profit after tax for the year ended March 31, 2022, grew by 48,9% to $2,8 billion, from $1,9 billion in the comparative period last year.

In the 2021 national budget statement, released in November 2020, the government announced that businesses would pay corporate tax in proportion to the gross income that is earned in either currency, excluding retention or liquidation thresholds.

OK said inflation-adjusted profit after tax for the year ended March 31, 2022, grew by 48,9% to $2,8 billion, from $1,9 billion in the comparative period last year.

In the 2021 national budget statement, released in November 2020, the government announced that businesses would pay corporate tax in proportion to the gross income that is earned in either currency, excluding retention or liquidation thresholds. Also, local businesses were told that 20% of locally-generated foreign currency receipts would be liquidated at the prevailing auction forex rate.

Further, the tax-free threshold under the intermediated money transfer tax (IMTT) was raised from $300 to $500. The maximum tax payable per transaction by corporates was increased from the current $25 000 to $800 000 on transactions with values exceeding $40 million.

“The group continued to endure excessive IMTT during the year,” OK Zimbabwe chairman Herbert Nkala said. “The increase in the transaction thresholds had a dramatic impact on the competitiveness of the formal retail sector, drives inflation and undermines pro­fitability and attractiveness of Zimbabwe as an investment destination.”

He continued: “The group continues to appeal to the authorities to reduce these transaction thresholds to create an even playing ­field for the retail trade which will benefit customers.

“An effective corporate tax rate of 34,3% is unsustainable.” During the period under review, income tax grew to $2,02 billion from a 2021 comparative of $1,59 billion. Nkala said overheads grew by 37% over the prior year owing to some of these tax charges.


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