FINANCE and Economic Development Minister, Patrick Chinamasa, has granted the Zimbabwe Revenue Authority (ZIMRA) permission to offset tax refunds due to clients against their tax liabilities.
According to the latest amendments to the Finance Act which took effect from January 1, a new section has been added to the Revenue Authority Act allowing the Commissioner General of ZIMRA to use tax refunds due to a taxpayer to settle taxpayers’ tax obligations.
This effectively means that ZIMRA would no longer be making any cash payments to its clients, save for cases in which the tax -payers with claims do not have recurrent tax obligations to the authority.
Until the latest changes to the law, taxpayers had to meet their tax obligations even in cases where ZIMRA owed them more in tax refunds. With the latest changes, taxpayers owed by ZIMRA would pay their tax obligations less what they are owed in refunds.
These changes come shortly after Chinamasa, late last year, allowed taxpayers with tax refunds to charge the authority interest in cases where the refunds took long to process.
It is also becoming increasingly common for private businesses that have been owed by government or any of its departments or parastatals to approach ZIMRA for possible conversion of the debts into tax credits.
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