1 ZIMBABWE REVENUE AUTHORITY

2

TAX COMPLIANCE FOR MEDICAL PRACTITIONERS 16 APRIL

PRESENTED BY E. MAUNDU 4

VISION “To be a beacon of excellence in the provision of fiscal services and facilitation of trade and travel.” MISSION “To promote economic development through efficient revenue generation, collection and trade facilitation.” 5

6 VALUES Integrity Transparency Fairness

OBLIGATIONS BASELINE OBLIGATIONS Voluntary compliance to all tax laws and regulations. Integrity – zero tolerance to corruption. Patriotism. 7

TAX OBLIGATIONS Tax obligations relate to compliance requirements under the following Acts: Income Tax Act (Chapter 23:06) Corporate/Company Tax Employment Tax (PAYE) Withholding Taxes Presumptive Tax 8

9 Value Added Tax Act (Chapter 23:12) Capital Gains Tax Act (Chapter 23:01) Customs and Excise Act (Chapter 23:02)

WHY PAY TAX? To enable government to provide public goods and services – e.g. Maintenance of: -Roads, schools, hospitals, clinics etc. National security: -Police force, Army, Prison service Provision of social services: e.g. -Salaries for Doctors, nurses, teachers etc. 10

NATURE OF INCOME FOR DOCTORS Income includes : Trade income (practising doctors) Investment Income (rental income, dividends, interest etc.) Employment Income (Doctors on payroll) 11

TAX OBLIGATIONS FOR DOCTORS Income Tax (Individual Doctors and Companies) Pay As You Earn (PAYE)-levied on employees including working directors Value Added Tax (VAT)-levied on taxable supplies Withholding Tax-levied on non compliant tax payers without an ITF

TAX OBLIGATIONS Contd’ INCOME TAX Doctors practising as individuals are liable to register for income tax in their individual capacity. Doctors may also be employed by a company in which case the company is liable for income tax and their monthly salaries are subject to PAYE 13

INCOME TAX Provisional payment of Income Tax is paid according to QPDs and is done on ITF 12 B as follows: 14

Pay As You Earn (PAYE) Every employer is required to withhold employees' tax (PAYE), an amount which is determined in accordance with the Tax Tables relating to that year of assessment. Employees include working directors or directors who receive other benefits over and above the board fees. 15

PAYE The due date for remittance of PAYE is on or before the 10th of the following month and such remittance should be accompanied by a return (Form P2.) Tax tables are published every year of assessment. They have daily, weekly, fortnightly, monthly and annual rates. These can be obtained from any ZIMRA office or from the website i.e. 16

PAYE Remuneration Includes: Salary, wage, bonus, cash in lieu of leave Leave pay, allowance, overtime pay Gratuity, commission, fee, pension Other incomes for services rendered to an employer by an employee Advantage or benefit from employment 17

PAYE Employee who has worked for the whole year and whose PAYE is calculated using the Final Deduction System does not submit returns. The following cases are non- FDS and individual employees are required to submit ITF 1 returns for assessment of final tax: those who left employment during the course of the year, received income from more than one employer, or changed employers during the course of the year. 18

PAY AS YOU EARN Contd. Form ITF16 Every registered employer is required to submit an annual return (ITF 16) of all persons employed by him detailing the salaries, wages, allowances, benefits and pension deductions for each person employed. The ITF16 should be submitted within 30 days after the end of the year of assessment and can be submitted electronically. 19

VALUE ADDED TAX (VAT) VAT REGISTRATION The threshold for registering for VAT is $ over a period of twelve months. Supply of medical services as defined in the VAT Act is an exempt supply. Doctors who deal exclusively in medical services as defined are not liable to register for VAT. Any other activities not falling under medical services are standard rated, e.g.. Letting out of commercial properties. 20

WITHHOLDING TAXES In terms of Section 80 of the Income Tax Act (Chapter: 23:06), a 10% withholding tax is deductible from all amounts payable to all persons who enter into contracts with the State or a statutory body, a quasi-government institution and taxpayers who are registered with the Zimbabwe Revenue Authority unless a payee furnishes the paying officer with a Tax Clearance Certificate.(ITF 263). Any person who enters into a contract (whether for goods or services) of $1000 or more involving a single transaction or multiple transactions should comply with this legal requirement. 21

WITHHOLDING TAXES Medical Aid Societies are required to withhold 10% on all payments to all service providers like doctors without a valid Tax Clearance Certificate ITF 263 at the time of payment. The payer (medical aid society) is required to issue a Withholding Tax Certificate showing details of the payee and amount withheld. Failure to withhold renders the payer liable for the full amount plus penalty and there is no recourse from the taxpayer whom you failed to withhold from. 22

WITHHOLDING TAXES Contd : The tax withheld and a fully completed return (REV 5) is due on or before the 10th of the month following that of withholding. NB. Attach a schedule of clients whom you have withheld the withholding tax showing the relevant details. All payments after the due dates attracts penalty and interest. 23

TAX CLEARANCE CERTIFICATE A Tax Clearance Certificate [ITF 263] is a document issued by ZIMRA to clients who are up to date with all their tax obligations. Complaint clients may also receive their ITF 263 through their s if the is updated with ZIMRA. The Tax Clearance Certificate is issued on an annual basis. 24

EXEMPTIONS FROM WITHHOLDING TAX a ) Payment under contract of employment. b) Sale in any shop in ordinary course of business in which case the seller is in business and the buyer is not. c) Payment to the state. 25

. Paying tax dignifies a nation 26

Thank you 27