Zimra to curb double taxation

THE Zimbabwe Revenue Authority (Zimra) says it is in the process of negotiating agreements with the country’s trading patners to curb the issue of double taxation.
Speaking at the official opening of the ATAF seminar held in Harare yesterday, Zimra commissioner-general, Faith Mazani said there was need to sign treaties that eliminate double taxation


“We are having an advanced training on negotiating double taxation agreement or tax treaties as they are known. This training that ensures African countries receiving foreign direct investments need to be prepared to negotiate agreements which avoid businesses that are coming in those countries being double taxed,”she said.

“For Zimbabwe specifically, it’s important as it comes at a time when we are anticipating more international business coming in.

“The most important bilateral tax treaties are the elimination of double taxation. If income from cross border trade and investment is taxed by two or more countries without any relief, such double taxation would obviously discourage trade and investment, and put a cost on businesses.”

Mazani said with the developments in international trade, African revenue administrations were being exposed to the risk of base erosion and profit shifting or transfer pricing, which then erodes the benefits of the taxes from investors.

“We need to negotiate agreements with the countries from which the businesses are coming so that we ensure we get the taxes that we are supposed to get from those countries and I am happy that we have already started negotiating new treaties.

“We recently signed a treaty with the United Arab Emirates in anticipation of business from that country and we are going to be reviewing our 19 treaties that we have and unfortunately we only have two treaties with African countries and we are looking forward to renegotiating with the other developed countries that we have agreements with, making sure that we get the benefits from the businesses that come and we don’t lose out in terms of our tax from those countries,” Mazani said.

Africa has been losing a lot of revenue through illicit financial flows, perpetrated by international business through BEPS and other transfer pricing mechanisms, and this has inhibited the planned social development programmes and slowed down progress in achieving the sustainable development goals.

She added that policy frameworks were requred to guide negotiation of new treaties, renegotiations and cancellations of existing treaties.

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  2. My dear young sister Commissioner of Taxes Mazanhi, it’s unfortunate you are in such an important high decision making position yet you do not understand that the most critically important investor in any economy is the Domestic Investor, NOT the so-called Foreign Direct Investor who apply zero-sum game rules which the illiterate African Government policy makers and parliamentarians as well as their supposedly technical advisors like you, don’t understand. It is the Domestic Investor that requires tax holidays, concessions, and in the case of Zimbabwe, removal of Provisional Tax(QPDs), for the latter is not a tax but a levy which adds onto unnecessary budgeted costs of doing business in an economy where no single company is making profit. Rather taking this as an insult to your person, I have no doubt you and your superiors would be patriotic and professionally mature enough to humbly seek further detail and advice from the writer through this forum.

  3. Spot on Gunike, the domestic or local investor has the country at heart!

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