The Zimbabwe Finance Act, 2018, introduced a tax amnesty programme in terms of which tax payers were granted tax amnesty from paying interest and penalties due on outstanding taxes accrued prior to 1 December 2017 as long as taxpayers came forward and settled their principal obligations within the period ending 30 June 2018.

Whilst the announcement was made in the budget speech at the end of 2017, and the amnesty provisions were included in the Finance Bill, 2018, the tax amnesty was only officially implemented after the promulgation of the Finance Act in March 2018. This was despite the fact that it was supposed to be effective from January 2018. Tax payers who were forward thinking and consulted their tax consultants began to put money aside for the payment plan in January 2018 whilst they waited for the Finance Act to make the tax amnesty official. However, in March of this year I attended a presentation on the Finance Act during which many tax payers requested an extension of the tax amnesty programme by a further 3 months due to the delay in the official processes becoming available. This request, whilst it was considered, was denied.

Instead, Commissioner General of the Zimbabwe Revenue Authority (“ZIMRA”) granted a different kind of “amnesty” termed “voluntary disclosure.” The announcement was made in a Public Notice which provided as follows:

In order to encourage taxpayers to come forward and volunteer disclosure of omitted income and other tax compliance obligations, the Commissioner General will grant full remission of penalties as part of an ongoing program notwithstanding the expiry of the amnesty on 30 June 2018.^[1]

The voluntary disclosure dispensation extends to:

1. Income omitted from returns dating back from 30 June 2018;
2. Any failure to comply with tax obligations including registration and failure to declare goods and services for duty purposes;
3. Any doubts about how to treat certain items for tax purposes and the request for an opinion from ZIMRA.

The final point is important because in the past, tax payers were afraid to seek an opinion from ZIMRA as they sometimes resulted in assessments and penalties. This is despite the fact that the tax statutes provide for the Commissioner General to provide arrangements and directions to overcome difficulties, anomalies or incongruities faced by tax payers in the application of the law (see for example section 76 of the Value Added Tax Act [Chapter 23:12]).

The period for making applications for voluntary disclosure ends on the 31st of December 2018, so as we enter the final quarter of the year, tax payers who have not already utilised it may wish to make use of this dispensation to regularise their tax affairs before we enter 2019. The result of making voluntary disclosure and adhering to the payment plan will be a waiver of penalties, civil penalties, fines and additional tax and, equally importantly, acquisition of a tax clearance certificate (“ITF263”).

If you aren’t sure how to make use of this dispensation, or whether you qualify, visit the ZIMRA website, or contact ZIMRA, a tax practitioner or your nearest tax lawyer for assistance.