Harare – The Zimbabwe Revenue Authority says following the promulgation of SI 32 and SI 33 of 2019 there are changes that affect submission of returns and payment, therefore all tax returns will be completed in RTGS$.
Statutory Statement (SI) 33 of 2019, subsection D, states that “for accounting and other purposes, all assets and liabilities that were immediately before the effective date, valued and expressed in United States dollars (other than assets and liabilities referred to in section 44C (2) of the principal Act) shall, on and after the effective date be deemed to be valued in RTGS dollars at a rate of 1:1 to the United States dollar.”
However, the Public Accountants and Auditors’ Board (PAAB) issued a new reporting guidance framework that permits companies to present financials for year ending December 31, 2018 in United States dollars (US$).
The guidance framework was issued after consultative work undertaken by the Zimbabwe Accounting Practices Board through its sub-committees, the Accounting Standards Committee (ASC) and the Committee for Auditing Standards (CFAS).
PAAB said the guidance was effective for financial periods commencing on or after January 1, 2018.
The board said the presentation currency for most firms was expected to remain as US$ for the period ended December 31, 2018, since there was no official local currency before February 22, 2019.
Presenting at the Retailers and Wholesalers Indaba in the capital on Thursday organised by the Confederation of Zimbabwe Retailers (CZR) a ZIMRA official who spoke on behalf of Commissioner General Faith Mazani said, “…the RTGS$ is now a currency and the reporting currency for tax purposes. All tax returns are therefore required to be completed in RTGS$.”
“ZIMRA requires the submission of one tax return for the different tax types - Income Tax Act, Value added Tax Act and finance Act provide laws on requirement to pay tax in foreign currency where the income or transactions are in foreign currency. This applies to VAT, PAYE, Withholding Taxes and Capital Gains Tax.”
However, he added that for administrative purposes, Income Tax Returns for year ended December 2019 shall be prepared in RTGS Dollars and withholding taxes are remitted in foreign currency where the payment being made is in foreign currency.
Following the introduction of the RTGS dollar by the Reserve Bank of Zimbabwe on February 20, 2019, most listed firms postponed the presentation of financials awaiting the issuance of guidance from the PAAB on the functional and presentation currency for reporting.
However, some of the ZSE listed companies, including Truworths, Old Mutual Plc and Simbisa Brands among other that have released their financial results to date, have resorted to the use of old reporting standards in the US$.
In response to the chaotic hyperinflationary period that had defined the country’s economic environment, Zimbabwe adopted the Multi-Currency System (MCS) in January 2009, with most entities adopting the United States dollar as the functional and presentation currency.
Equity Axis News
