TAX NEWS - JUNE 2010

Zimbabwe Tax: Zimbabwe gov't unveils new draft bill for income tax

The Zimbabwe government has unveiled a new draft bill for income tax which is expected to enhance the taxing and accounting system in the country.

Addressing a press conference on Friday to unveil the new legislation which tax experts also attended, Finance Minister Tendai Biti said it was consistent with international best practices and simpler than the existing one.

"The draft Act contains a comprehensive section on tax accounting principles which ensure consistency in the treatment of certain financial transactions," he was quoted by local media New Ziana as saying.

Biti said the bill would expand the tax band through new strict and tight provisions that curtailed leakages besetting the current tax regime.

He said the new legislation would introduce anti tax evasion measures.

"The proposed legislation seeks to strengthen the current legislation through elaboration of what constitutes unacceptable avoidance arrangements and the tax consequences of such arrangements," he said.

Biti said the bill would enable increase in revenue inflows as it contained figures at sectoral level enabling the government to know the amounts it would receive from these.

He said the bill would also introduce a new concept of taxation based on residence as it defined the terms "resident individual, temporary resident individual, resident company and non-resident company."

The Appeal procedures were being reviewed to consider alternative structures that enhanced effectiveness of the fiscal dispute resolution process, he said, adding the draft bill would be thrust in the public domain to gather feedback.

"Feedback from stakeholders will be utilized to formulate definitively the transitional measures," he said.

A steering committee drawing membership from the government departments and the private sector crafted the draft Bill