Budget 2022-2023 |

Overview
On Thursday 24 November 2022, the National Budget was presented by the Honourable Minister Mthuli
Ncube, Minister of Finance and Economic Development in the recently opened parliament in Mount
Hampden. The budget theme was “Accelerating Economic Transformation.”

This summary includes the key highlights from the 2023 National Budget Statement with the
corresponding draft Finance Bill. We have noted some inconsistencies between the documents and
expect these to be resolved in updated versions of the Finance Bill.

In addition we have included pronouncements from the Finance Act No. 8 of 2022 that was promulgated
on the 24th of October 2022.

Please note, the 2022 National Budget Statement and draft Finance Bill proposals are yet to be
promulgated into law, and are therefore subject to changes.

The information contained herein is of a general nature and is not intended to address the
circumstances of any particular individual or entity. Although we endeavour to provide accurate and
timely information, there can be no guarantee that such information is accurate as of the date it is
received or that it will continue to be accurate in the future. No-one should act on such information
without appropriate professional advice after a thorough examination of the particular situation.

© 2022 KPMG, a Zimbabwean partnership and member firm of the KPMG global organization of independent member firms affiliated with
KPMG International Limited, a private English company limited by guarantee. All rights reserved.

Key Highlights not in Finance Bill
Rebasing of Capital allowances
• Rebasing of unredeemed capital
allowances as at 1 January 2023 to local
currency equivalent of outstanding foreign
currency invoice value at the beginning of
each financial year.
Interest on outstanding taxes
• To align with bank policy it is proposed to
increase interest on outstanding tax
obligations to the Bank Policy Rate which
is currently 200%.
• To convert all ZWL$ outstanding tax debt
to foreign currency at time debt is incurred,
however payment can be made in ZWL$ at
prevailing inter bank rate at time of
payment.
Penalty of late submission of tax
returns
• Penalty to be pegged at US$30 payable at
local currency equivalent for each day
return remains outstanding.
Value Added Tax
• VAT deferment threshold to be increased
from US$500 000 to US$1 000 000 for
importation of capital goods in specified
Industries.
Special economic zone status.
• Special economic zone tax incentives are
not applicable to companies in mining
sector due to the fact that minerals are
exported and there is low levels of
beneficiation within the country.
• Limit the rebate of duty on companies that
qualify as special economic zones i.e. they
export 100% of what they manufacture.
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Budget 2022-2023 |
Exports
• Electronical sealing of excisable goods e.g.
cigarettes.
• Exports in bond be consigned to designated
routes through loading ports of exit.
• Penalties to be charged on transporters that
deviate from designated routes.
• Reduction of exporting period for goods under
bond to 5 days from 10 days.
Duties
• Rebate of duty on capital equipment to be
replaced with a suspension of duty on
specified capital equipment in tourism sector
and the minimum value to be pegged at
US$25 000.
• The legislation relating to suspension of duty
on specific mining development operations will
be not be renewed, however mining
companies will continue to import until expiry
of current legislation on 01 December 2022.
• Review of flat of excise duty on energy drinks
rate from US$0,05 to US$0.10 per litre, with
effect from (“w.e.f.”) 1 January 2023.
• To expand the list of capital equipment to be
zero rated for Customs duty on importation in
the agriculture, mining, energy, manufacturing
and health sector.
• The suspension of duty on basic commodities
will not be extended, the SI expired on 16th of
November.
• To support local production it is proposed to
gradually reduce ringfenced milk powder and
raw cheese imports under suspension of duty.
Income tax exemption
• Proposal to exempt POTRAZ from Income tax.
|Budget 2022-2023

Employment Tax
• In the draft Finance Bill the tax tables from August 2022 to September 2022 have been
annualized for the 2023 tax year.
• The employment tax free monthly threshold remains ZWL 75 000.
The following changes were promulgated in Finance Act No. 8 of 2022 gazetted on 24th of
October 2022:
• The deemed motoring benefit remain unchanged from previous year.

Lower limit in Upper limit in Lower limit in Upper limit in

% %
ZWL$ ZWL$ US$ US$

0 900 000 0 0 1 200 0

900 001 1 716 000 20 1 201 3 600 20

1 716 001 3 120 000 25 3 601 12 000 25

3 120 001 5 760 000 30 12 001 24 000 30

5 760 001 12 000 000 35 24 001 36 000 35

12 000 001 - 40 36 001 - 40

Annual Pay AS You Earn (P.A.Y.E) income tax tables

Deemed cost to Deemed cost to

Engine capacity employer Engine capacity employer US$
ZWL$(2022) (2022)
0cc – 1 500cc 312 500 0cc – 1 500cc 625

1 501cc – 2 000cc 415 000 1 501cc – 2 000cc 830

2 001cc – 3 000cc 625 000 2 001cc – 3 000cc 1 250

3 001cc – 830 000 3 001cc – 1 660

Source: Finance Act No. 7 of 2021 US$ Annual Motoring benefits deemed value tables

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KPMG International Limited, a private English company limited by guarantee. All rights reserved.
|Budget 2022-2023

Corporate Income Tax

Remittance of taxes through Financial • Non resident to appoint a resident
Intermediaries representative to secure registration in writing

The full amount (taxes, fees, charges penalties

• Penalties for non compliance.
duties levies) paid by tax payers through an • Civil infringement failure to timeously comply.
approved financial intermediaries must be
credited to the Consolidated fund within 48 hours
Penalties for default
of such payment. • Fixed penalty of US$30 per day or Zimbabwe
dollar equivalent on failing to comply,
Failure by the banks and financial institutions to
restricted to a period of 90 days (US$2,700).
remit within the 48 hours will result in penalties of
15% for US$ payments and 200% for ZWL$ Self Assessment
payments. Every specified taxpayer shall not later than 4
months after the end of the tax year or if CG has
Registrable taxpayer (trader)
exercised discretion to accept some other date
Registrable taxpayer means a person (trader) other than the end of the year of assessment
earning income from trade in the last quarter of submit final tax return.
the calendar month immediately before
registration by reference to;
Payment of provisional tax
If the Commissioner General has exercised
• turnover of his or her business; discretion to accept some other date other than
• average number of employees employed by the end of the year of assessments, the dates
him or her in each of the four quarters; or taxpayers’ prepare accounts and QPD payments
will be adjusted accordingly.
• the average value of the assets used for the
purpose of his or her business in each of the
four quarter; or
• a combination of all or any of the foregoing,
excluding
- Presumptive tax payers unless these are
specified under section 25B
- Any employer registered under 13 h
schedule.
Registration of traders
• The Minister will prescribe persons requiring
registration, residents and non residents and
notify these persons who will be required to
register within 30 days of such notice.
• Any changes to the address or ceasing to
registrable taxpayer to be provided to CG
within 14 Days.

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KPMG International Limited, a private English company limited by guarantee. All rights reserved.
|Budget 2022-2023

Corporate Income Tax

*The following changes were promulgated in Automated Financial Transaction tax
Finance Act No. 8 of 2022 gazette on 24th of • AFT tax payable on cash withdrawals
October 2022: effected through an A.T.M. to increase to
• The fixed standard value (FSV) in relation to $0,05 per withdrawal of ZWL$ 1,000 or more
a class of stud livestock of a farmer means or
the actual cost to the farmer where the cost • US$0,05 per withdrawal of US$ 1,000 or less
price of livestock is less than ZWL$75,000. or
• If the cost is more than $750,000 it is either • 2% of the value of a withdrawal above US$
the FSV fixed by the farmer or ZWL$75,000 1,000
whichever the farmer may elect.
• Purchase Price Value in relation to stud
livestock shall be, if cost is less than ZWL$75
000, the value shall be the cost of the animal,
and if the cost is more than ZWL$75,000, the
cost price of the animal or
ZWL$75,000 whichever the farmer may elect.
• Exemption of the first ZWL$750,000 in
respect of rental income accruing to a
taxpayer who is of or over the age of 55.
• Youth Employment Tax Initiative credit
increased to ZWL$25,000/additional
employee up to a maximum aggregate
amount of ZWL$1,120,000 in any year
of assessment.
Resident Shareholders’ Tax
• Excess management fees in relation to a
local company or subsidiary of a local
company is a deemed dividend which will
be subject to Resident Shareholders’ Tax.
This dividend together with the dividend
emanating from thin capitalisation is not
exempted from withholding taxes.
WHT on local Suppliers
• An increase to ZW$500,000 in the threshold
on which withholding tax on local contracts
will not apply where one is not in possession
of a tax clearance certificate.
• The threshold of foreign currency was not
changed and remain at US$1 000
• WHT was increased from 10% to 30%.

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KPMG International Limited, a private English company limited by guarantee. All rights reserved.
14 | Budget 2022 -2023

Value
Added Tax
• VAT rate to increase to 15%. This includes a
supply of imported services, importation of
goods, motor vehicles sold by persons who are
motor dealer. (w.e.f. 01 January 2023)
• Transactions receipts of a bookmarker
licensed in terms of the betting and Totalizator
control act [Chapter 10:02] to be levied a VAT
rate of 15% (w.e.f. 01 January 2023).
• Gaming revenue received by the holder of a
casino license in terms of Casino Act [Chapter
10:03] to be levied a VAT rate of 15%
(w.e.f. 01 January 2023).
• Banker’s revenue received by a banker in
terms of Casino act [Chapter 10:03] to be
levied a VAT rate of 15% (w.e.f. 01
January 2023).
• Supply of Cellular Telecommunication service.
(w.e.f. 01 January 2023).

Permissible deductions in respect of

input tax
• The results from the application of a rate of
exchange in excess of the parity rate of one
United States dollar to a bond note unit, if the
goods and services in question were acquired
by such registered operator in a legal tender
other than foreign currency.
• in respect of any amount of tax on the
exportation of unbeneficiated, lithium,
unbeneficiated hides, unbeneficiated platinum,
uncut and cut dimensional stone determination
paid by the registered operator in terms of
section 12A, 12B, 12C, 12D or 12E, or any
other export tax of a like nature that may be
enacted under this Act;”.
• Creation of an electronic platform to enable the
electronic recording by taxpayers of
transactions that may be liable to tax under this
Act (to be known as the Virtual Fiscalisation
System), the Minister shall in regulations and
prescribe the rules to be followed by taxpayers.

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KPMG International Limited, a private English company limited by guarantee. All rights reserved.
15 | Budget 2022 -2023

Value Added
Tax
*The following changes were promulgated in
Finance Act No.8 of 2022 which was gazetted
on 24th of October 2022:
• Reduction in VAT registration threshold from
US$60,000 to US$40,000 or local currency
equivalent – at current exchange rates this
would be approximately ZWL$25 million.
(w.e.f. 01 September 2022)​
• Registered operators shall fall within Category
C if the value of their taxable supplies exceeds
or is likely to exceed ZWL$110 million. If a
registered operator’s total value of the taxable
supplies from agricultural, pastoral or other
farming activities does not exceed ZWL$50
million, the registered operator shall fall within
Category D.
• An increase on the minimum cost of capital
equipment for deferment of VAT to be granted
from US$100,000 to US$500,000.
• The removal of the Commissioner’s
discretionary powers in allowing input tax
invoices to be claimed after expiry of 12
months as was stated by the proviso to
section 15(2)(a).
• Clarification that tax invoices generated before
1 January 2022 may be used to claim input tax
no later than 31 March 2022 and the
provisions of section 15(2)(a) of the VAT Act
which provide a 12-month period to claim
input tax does not apply to these tax invoices.

• Suspension of the collection of VAT

on exportation of unbeneficiated platinum for
12 months beginning 1 January 2022. The
exemption shall however not apply to certain
specified suppliers who have built plants in
Zimbabwe capable of producing platinum
group concentrates.

• VAT Act to recognise electronic currency as

legal tender to align the VAT definition of
currency of trade to the Reserve Bank Act
definition of legal tender

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KPMG International Limited, a private English company limited by guarantee. All rights reserved.
16 | Budget 2022 -2023

Value
Added Tax
*The following changes were promulgated in
Finance Act No.8 of 2022 which was gazetted
on 24th of October 2022:

• VAT registered operators to now have the

option to pay duty in foreign currency. This is
meant to address VAT challenges of excess
output tax in US$ and accumulating ZWL$
VAT refunds. (w.e.f. 01 September 2022).

• Definition of “electronic commerce operator”

inserted in the VAT Act for ease of VAT
Administration. The definition is an adoption
of the definition in the Income Tax Act.

• Section 36 amended to provide that, unless

the Commissioner so directs, an objection
does not suspend the payment of tax
pending the decision of a court. Previously,
the provision was in relation to appeals only.

• Failure to timeously pay VAT will be

considered a criminal offence punishable by
a fine not exceeding level 11 and/or
imprisonment for a period not exceeding
2 years.

• VAT refunds not exceeding ZWL$30,000 will

not be processed but will be carried over to
the next succeeding tax period.

• Supply or importation of capital goods which

cost less than ZWL$30,000 shall not be
deemed to be a supply

• A supplier shall not be required to issue a tax

invoice if consideration does not exceed
ZWL$5,000.

• Every clearing agent shall be deemed to

charge a clearance fee of at least
ZWL$25,000 on each bill of entry.

© 2022 KPMG, a Zimbabwean partnership and member firm of the KPMG global organization of independent member firms affiliated with
KPMG International Limited, a private English company limited by guarantee. All rights reserved.
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The information contained herein is of a general nature and is not intended to address the circumstances of any particular
individual or entity. Although we endeavour to provide accurate and imely information, here can be no guarantee that
such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should
act on such information without appropriate professional advice after a thorough examination of the particular situation.

© 2022 KPMG, a Zimbabwe partnership and member firm of the KPMG global organiza ion of independent member firms
affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

The KPMG name and logo are registered trademarks or trademarks of KPMG Interna ional.

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