Why you need Tax Clearance certificate (ITF 263)

Why you need Tax Clearance certificate (ITF 263)

What is a tax clearance certificate?

As explained by Zimbabwe Revenue Authority (ZIMRA), A Tax Clearance Certificate (ITF 263) is a certificate issued by the Commissioner General of the Zimbabwe Revenue Authority (ZIMRA), to a person liable to pay tax, provided that the taxpayer’s tax position is satisfactory.

How can you get a tax clearance?

First of all one has to be registered with ZIMRA for a tax clearance to be issued.  Moreover, for a tax clearance to be issued, one’s tax affairs have to be in order, i.e. tax returns & tax payments will have to be up to date and if the taxpayer is under a payment plan, it has to be adhered to religiously.

what is the importance of a tax clearance?

Most people think that you can trade and go about you business without a tax clearance. While this may be true, failure to have a valid tax clearance means that your tax affairs are not in order and you are in contravention of the country’s tax laws. It is a statutory requirement for all traders have a valid tax clearance and failure to provide a valid tax clearance means 10% Withholding tax has to be withheld on any contract with such a trader. This withholding tax of 10% is on each contract and is largely punitive and so it is far better to have your tax affairs in order and pay your corporate taxes rather than paying withholding tax on your contracts.

Most people think that you can trade and go about your business without a tax clearance. While this may be true, failure to have a valid tax clearance means that your tax affairs are not in order and you are in contravention of the country’s tax laws.

  • It is a statutory requirement for all traders have a valid tax clearance and failure to provide a valid tax clearance means 10% Withholding tax has to be withheld on any contract with such a trader in terms of section 80 of the Income Tax Act. This withholding tax of 10% is on each contract and is largely punitive and so it is far better to have your tax affairs in order and pay your corporate taxes rather than paying withholding tax on your contracts.
  • A tax clearance is a requirement for the issuance and renewal of any operator’s licence in respect of the operation of any public service vehicle [Section 80A (2)]
  • A tax clearance is a requirement for the issuance and renewal of a licence in respect of any trade or business required to be licensed in terms of the Shop Licences Act [Chapter 14:17]
  • A tax clearance is a requirement for the issuance and renewal of a certificate of registration of a mining location under the Mines and Minerals Act [Chapter 21:05] to a miner.
  • A tax clearance is a requirement for the issuance and renewal of a licence to any person who owns, conducts or operates a designated tourist facility as defined in the Tourism Act [Chapter 14:20] or who provides or assists in providing any service which is such a designated tourist facility.

Avoid  the hassles associated with not having a valid tax clearance certificate. Contact Sabarm Today and let us give you peace of mind on all your tax issues.

 

 

 

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