ZIMBABWEANS working outside the country have expressed outrage at the proposed income tax reforms that might see them paying tax by 2014.
Report by Bernard Mpofu Chief Business Reporter The proposed Income Tax Bill will overhaul the country’s tax regime shifting from source-based income taxation to a residence based one.
The Bill is expected to come into effect in 2014 if signed into law.
Observers say the proposed law exposed the government’s desperation to increase its revenue streams as it increasingly becomes clear that the diamond industry will not be the panacea for economic revival.
The new law could affect many Zimbabweans living in South Africa and Botswana without permanent resident status. It will also affect cross-border operations with head offices in Zimbabwe.
Independent statistics show that nearly three million Zimbabweans have emigrated to seek better employment prospects in neighbouring countries.
Critics argue that already the current tax laws have triggered the flight of skilled labour to neighbouring countries and other continents “This Bill repeals and replaces the Income Tax Act (Chapter 23:060), which was first enacted in 1967,” reads part of the proposed legislation.
“Among the major changes of principle embodied in this Bill is the shift from the source-based system income taxation that prevails under the existing income tax regime to a residence-based one,” reads the Bill in part.
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Under this Bill, a person shall be regarded as resident in Zimbabwe after staying for one or more periods amounting to 183 days or more within the same year.
The Income Tax Bill will affect government employees posted outside Zimbabwe during the year of assessment.
It also proposes to abolish the Special Court for income tax appeals while retaining the fiscal appeal court, which will now become the appellate court of first instance for income tax appeals.
