FINANCE ACT NO. 8 OF 2020.

By Bianca W. Mahere, Associate.

In our last article, we analysed the first part of the Finance Act No.8 of 2020. This article intends to take the reader through the remaining parts of the Amendment and highlight the salient provisions of the Act.

1. Part II- Amendments to the Income Tax Act [Chapter 23:06]

 

• There is an addition to section 2 of the Act on the definition of ‘year of assessment’. Beginning on the 1^st of January 2020, the taxable income from employment of a person consists of two periods:

2020. The seven (7) month period beginning on the 1^st of January 2020 and ending on the 31^st of July 2020.
2021. The five (5) month period beginning on 1^st August 2020 and ending on 31^st December 2020 (this is in relation to the level of taxable income and specified percentages of tax deductible as discussed in the first article. The level of income mentioned in the table relates to the five (5) month period.)

• The following have been exempted from remittance of Income Tax:

1. The Victoria Falls Stock Exchange- (under conditions in the Exchange Control Act). The amounts received or accrued on the sale or disposal of any shares listed on the Victoria Falls Stock Exchange are also exempt from payment of the Capital Gains Tax Act [Chapter23:01].
2. Special purpose vehicle initially owned by the Infrastructure Development Bank of Zimbabwe where private contractors undertake to construct on campus student accommodation at any public institution of higher or tertiary education.

• Risk allowances payable to frontline public sector health personnel involved in combating the COVID-19 public health State of Disaster.

 

2. Part IV- Amendments to Chapter VII of Finance Act [Chapter 23:04] (On Mines and Minerals)

 

• Section 37 and 37A of the Finance Act has been amended. This provision relates to rates of mining royalties, duty and fees and collection thereof. The Minerals Marketing Corporation has been nominated as an agent of the Commissioner- General of the Zimbabwe Revenue Authority and can deduct royalties of some named minerals at source. Penalties are payable if the said royalties are not remitted timeously. The Royalties are calculated based on the gross fair market value of the mineral.

 

3. Part V- Amendments to the Companies and Other Business Entities Act [Chapter 24:31]

 

The mandatory re-registration of companies under the Finance Act Amendment No.8 of 2020.

 

• In relation to companies and business entities, there are some developments which you must be aware of. Section 303 of the Act has been amended, which provision deals with re-registration of companies and business entities. As you might have been aware, every company is required to re-register under this Act failing which a company might face being stuck off the register of companies. The new amendment extends the re-registration to not later
• than the 13^th day of February 2023. An exception to the re-registration is placed on companies which are listed in the 1^st Schedule to the Global Compensation Deed signed on the 29^th of July 2020 between the Republic of Zimbabwe, the Commercial Farmers Union of Zimbabwe, the Southern African Commercial Farmers Alliance- Zimbabwe and the Valuation Consortium (Private) Limited.

 

• We therefore advise you to take the above mentioned developments into consideration and make the necessary steps to comply with the law. Our aim is to assist you to be compliant with the law.

 

Should you require any further information on the above please do not hesitate to contact us.