CHINHOYI UNIVERSITY OF TECHNOLOGY

ACCOUNTING SCIENCE AND FINANCE

DEPARTMENT
P. Bag 7724, CHINHOYI, ZIMBABWE
+263 67 22203-5 Ext. 1208
Website: www.cut.ac.zw
E-mail: inzero@cut.ac.zw

The Chairpersons Office

COURSE OUTLINE 2023

COURSE LECTURER: Dr E. Muguti, PhD, M. Comm, BSc, PGDHE, PGDAT, AICTA, RTAcc(Z)
General Information
Office: Block 12
E-mail: emuguti@cut.ac.zw; eriazerimuguti@gmail.com; +263775712712

1.0 Course Title and Code

Advanced Taxation – CUAC 408

2.0 Time Allocation

3 weeks of intensive block teaching and learning

3.0 Rationale & Synopsis

To equip students with the adequate Zimbabwean taxation knowledge and the
taxation regime obtaining. This is a continuation of the Tax Law and Practice (CUAC
212) course but with particular emphasis on tax planning and international taxation
issues.
The course aims to advance students’ knowledge of the Zimbabwe tax system and
also international taxation. This is a continuation of the tax law and practice course
but with particular emphasis on tax planning issues, which is the application of
taxation knowledge for the best advantage of business and individuals and also
international taxation issues. To enrol for this course, candidates must have
completed and passed a course in Zimbabwean taxation. The main areas to be
covered include taxation of; miners, hire purchase and suspensive sale transactions,
deceased estates and trusts, transfer pricing, withholding taxes, international
taxation and double taxation agreements, presumptive taxes, investment strategies
and personal finance, tax avoidance and tax evasion, advance tax rulings and the tax
administrative framework. Tax planning, provision of tax advice and tax compliance
will cover the main tax heads including Income tax, Capital Gains Tax and Value-
Added Tax (VAT), Estate Planning, Withholding Taxes and International taxation,
among others. The course emphasizes the practical gathering and evaluation of the
relevant information, computation of tax liability, filing of the requisite tax returns,
making of tax payments within appropriate due dates, and practical use of online
filing and payment platforms and other information technologies. The approach to
this course emphasizes simulated, real-life, practical tax issues.
 Practical work:
Students brainstorm, design, prepare, complete, apply and submit:
• Tax liability computation schedules for mining corporates and individuals.
• Detailed reports, memorandums and other communications of the tax incentives, tax
health, and other tax planning and compliance issues for miners.
• Taxable income and tax liability computation schedules for hire purchase and
suspensive sale transactions.
• Transfer pricing, VAT, income tax, capital gains tax, withholding tax, double taxation,
deceased estates and trusts tax computation schedules, documentation, completed
returns and supporting schedules.
• Tax health checks, tax planning and tax advisory reports and recommendations on
various tax heads based on given or collected information.
• Valid tax objections and appeals reports and emails as well as drafted and well-
supported verdicts on tax court cases.

4.0 Purpose
4.1 Enable students compute tax payable for all corporate enterprises, estates and
individuals.
4.2 Enable students to plan effectively for taxation and minimize tax payable wherever
possible.
4.3 Enable students discern between tax avoidance and tax evasion issues
4.4 Enable students to understand the administration of different taxes and appreciate
the importance of tax compliance.

5.0 Main Capabilities

By the end of the course, students should be able to:
5.1 Explain the context and purpose of taxation.
5.2 Compute tax liability for individuals, corporates and estates.
5.3 Define tax planning and comprehend its mechanics.
5.4 Outline the mechanics of tax administration.

6.0 Method of Instruction

Each section of the course outline will be thoroughly demonstrated in the lecture, with
comprehensive examples articulated to the students. The following methods among others
will be used:
6.1 Lectures.
6.2 Practical Assignments & Presentations.
6.2 Demonstrations
6.3 Group discussions
6.4 Tests

7.0 Students Assessments

 • Coursework comprises of at least two (2) tests, practical assignments, reports
and presentations, which constitute 30% weight of the final mark. Questions in
the tests will cover all the pertinent aspects of the course covered up to the
time of the test, and will serve as mock exams, in preparation for the final
exam.
• Final exam constitutes 70% of the final mark and will examine all the pertinent
aspect of the course.
• The final mark will be a summation of course work and the exam mark.
• The administrator will provide online course evaluation forms to students.
• The range of marks attained by the student will be classified as follows:

Degree Class Range of Marks Description

1 75% - 100% Distinction
2.1 65% - 74% Pass
2.2 60% - 64% Pass
3 50% - 59% Pass
F 0% - 49% Fail

8.0 Course Content

8.1 Income tax on Miners

➢ Comparison of miners and other traders.

➢ Capital Expenditure, exemptions, allowable deductions
➢ Capital Redemption Allowance (CRA).
➢ Management fees and Interest.
➢ Assessed losses and ring fencing.
➢ Recoupment and mining claims.
➢ Other allowable mining expenditure.
➢ Computation of tax liability for miners
➢ Tax incentives for miners and ways to minimise tax liability.

8.2 Income tax on Hire Purchase transactions.

➢ Income tax on movable items.

➢ Income tax on immovable properties.
➢ Capital gains tax on specified assets
➢ Suspensive sale allowances for minimising both income tax and capital gains
tax.
➢ Computation of tax liability.

8.3 Deceased Estates and Estate Planning

➢ Formulation of deceased estates and insolvent estates.

➢ Taxation of pre-death and post-death income.
➢ Income tax on beneficiaries, trusts and the deceased estates.
➢ Estate duty.
➢ Estate planning.

8.4 Transfer Pricing and International Taxation

 ➢ Base Erosion and Profit Shifting (BEPS).
➢ OECD and United Nations Conventions on Transfer Pricing.
➢ Transfer Pricing Regulations in Zimbabwe
➢ SI 109 of 2019, s98A and s98B a.r.w 35th Schedule Income Tax Act.
➢ Transfer pricing methods
➢ Transfer pricing return and due date
➢ Transfer pricing documentation.
➢ Double Taxation Agreements (DTAs)
➢ Double Taxation Relief.

8.5 Withholding Taxes in Zimbabwe

➢ Definition of & Benefits/Reasons behind Withholding taxes.
➢ Withholding Tax on Tenders.
➢ Resident Shareholder Tax.
➢ Non-Resident Shareholders Tax.
➢ Resident Tax on Interest.
➢ Non-Resident tax on Fees.
➢ Non-Resident Tax on Remittances.
➢ Non-Resident Tax on Royalties.
➢ Tax on Non-Executive Directors Fees.
➢ Capital Gains Withholding Tax
➢ Value Added Withholding Tax.
➢ Automated Financial Transaction Tax.
➢ Property or Insurance Commission Tax.
➢ Tobacco Levy.
➢ Electronic Commerce Transactions (Income Tax).
➢ Mining Royalties.
➢ Withholding Tax Return & Due Dates, Compliance Obligations.

8.6 Tax planning issues & Tax Advice

➢ Computation of tax due on individuals and companies.

➢ Minimising or Deferring Tax Liabilities.
➢ Allowances available to companies and individuals.
➢ Fiscal incentives for individuals and companies under income tax, capital gains
tax and value added tax.
➢ Tax avoidance and evasion.
➢ Anti-avoidance legislative provisions
➢ Legislative options and elections for minimising tax liability under income tax,
capital gains tax and value added tax.
➢ Transfer Pricing Principles and Methods.
➢ Tax incentives and reliefs for BOOT/BOT operators, industrial park developers,
licensed investors and manufacturing companies.
➢ Capital gains tax reliefs under the following: transfer of assets between
companies under the same control, between spouses, in a scheme of
reconstruction, in a scheme of localization and transfer by an individual to a
company under his/her control.
➢ The use of exemptions and reliefs in deferring & minimising corporation tax
liabilities.
➢ Relief on recoupment available for transfers of assets between companies
under common control.
8.7 Tax Administrative matters in Zimbabwe

➢ Tax assessments, tax returns and due dates.

➢ Taxpayer & Commissioner Obligations & Rights.
➢ Penalties, Fines and Interest.
➢ Objections and appeals.
➢ Presumptive taxes.
➢ Burden of Proof
➢ Advance tax rulings

Course Text(s) & Recommended Reading

1. The Income Tax Act [Chapter 23:06]
2. The Finance Act [Chapter 23:04]
3. The Capital Gains Tax Act [Chapter 23:01]
4. Value Added Tax [Chapter 23:12]
5. Income Tax in Zimbabwe (2001) by LW Hill 5th Edition Durban: Butterworth
publication.
6. Nare, S (2022) Tax law and Practice in Zimbabwe, Rebasotho Investments (Pvt) Ltd,
Harare.
7. Nyatanga, P (2022) A Guide to Zimbabwe Taxation.
8. Zimbabwe Taxation by E. Tagara and W Gono [latest edition] Ng Publishers.
9. Ernst and Young Tax Guides [www.earnstyoung.com.
10. Deloitte and Touché Tax Bulletins [www.deloitetouche.com].
11. Zimbabwe Revenue Authority website [www.zimra.co.zw].
12. Marvelous Tapera (2022) Tax principles in Zimbabwe.
13. Journal Articles, ACCA, CIS & CPA Modules on Zimbabwean Taxation
Practical Assignment, Reports & Presentations

You are required to visit your allocated entity/CUT project and perform the following
activities;
1. Tour the premises and observe the operations and assets.
2. Interview key personnel on the operations, income, expenses and assets.
From the activities 1 and 2 outlined above, gather information on the following tax
compliance and planning issues and do the related assignments, reports and presentations.
Your analyses and discussions should be backed by relevant legislation, case law and any
appropriate computations.

A. General Project/Entity Information

Gather general information on the following aspects about the entity;
(i) Full name and Ownership Structure
(ii) Mission, Objectives and Key Business
(iii) Products and Markets
B. Income Tax: Employee Tax

B1. Employees and Eligibility for PAYE

• Gather data on the number of employees and salary grades and then determine if the
entity should be registered for PAYE as an employer.
• Determine the entity’s tax compliance obligations with regards to PAYE.

B2. Remuneration composition and taxability

• Collect data on the composition of the remuneration for the employees, including but
not limited to salaries, allowances, and s8(1)(f) fringe benefits.
• Determine the remuneration items which are exempt and those which are taxable;
with proper legislative justification.
• Collect data on the employee profiles with regards to age, disability, blindness,
medical aid contributions, medical shortfalls. Use that information to determine any
tax credits available to the employees. State the amounts applicable.
• Based on the composition of the remuneration, discuss how it should be charged PAYE.
Make reference to the appropriate tax tables to be used (usd or rtgs, and any
conversions necessary).

B3. Tax returns

• Based on the information gathered in B1 and B2 above, determine, the monthly and
annual PAYE returns which are necessary for the entity with regards to the entity.
• Also outline their contents and due dates, and fill in sample returns (subject to the
availability of the information from the entity).
B4: Comparative Analysis & Recommendations
• Based on your findings and analysis above, compare what the entity is currently doing
with regards to tax compliance and what it should be doing and make any necessary
recommendations.
C. Income Tax: Corporate Tax

C1. Gross Income & Exemptions

• Collect data on the sources of income/revenue for the entity. This should include both
any trading and investment activities and also grants and subsidies.
• Determine which of the income/revenues identified above is taxable and which is
exempt from corporate tax, with proper legislative justification.
C2. Allowable Deductions.
• Collect data on the regular and irregular expenditure incurred by the entity.
• Determine which of the expenditure/expenses are allowable deductions and which
ones are prohibited and provide proper legislative justification.
C3. Capital Allowances & Tax Incentives
• Gather data on the tangible, biological and intangible capital assets owned by the
entity and/or used for business.
• Determine the eligibility of each and every asset identified above for capital
allowances. State the capital allowances applicable and their respective rates.
C4. Corporate Tax Credits
• Collect data on the entity’s employment of the youth and disabled, and assess its
eligibility for any corporate tax credits. State the amounts applicable, if any.
C5. Withholding Taxes
• Collect data on the entity’s dealings/transactions with its stakeholders listed below,
and determine any withholding tax implications.
• You should state the type of withholding tax, the tax rate, the return, the due date
and any other withholding tax compliance requirements.
(i) Shareholders/owners
(ii) Consultants
(iii) Directors
(iv) Unregistered suppliers/Suppliers without tax clearances.

C6. Transfer Pricing in Taxation

• Gather data on any transactions between the entity and its associates.
• Use that information to determine the transfer pricing implications, with regards to
prices charged, and returns.

C7. Tax rates, Tax Returns and due dates.

• Based on the information above, determine the corporate tax rate, corporate tax
returns and due dates, that the entity should prepare.
• Prepare sample returns or extracts (subject to the availability of information from the
entity).
C8: Comparative Analysis & Recommendations
• Based on your findings and analysis above, compare what the entity is currently doing
with regards to tax compliance and what it should be doing and make any necessary
recommendations.
D. Capital Gains Tax
D1. Assets eligible for CGT Tax If Sold.
• Collect data on the capital assets owned by the entity.
• Determine the eligibility of each of the assets for capital gains tax, if sold.
D2. Taxability of the Eligible Assets.
• Based on the information collected in D1 above, determine which of the eligible
assets will have their proceeds taxable under capital gains tax and which ones would
be exempted.
D3. Tax Rates, Tax Returns & Due Dates.
• Assuming the eligible assets are sold, determine the capital gains tax rates that would
be applied, the returns required and the due dates.
D4: Comparative Analysis & Recommendations
• Based on your findings and analysis above, compare what the entity is currently doing
with regards to tax compliance and what it should be doing and make any necessary
recommendations.
E. Value Added Tax

E1. Eligibility to register for VAT

• Collect data on the nature of goods and services provided by the entity.
• Collect data on the average monthly/annual turnover from regular activities the
organisation.
• Use the data collected above to determine if the entity should register for VAT. If
eligible, state the VAT category most ideal.
E2. Nature of Supplies.
• From the data collected above, classify the goods and services provided by the entity
into the following categories;
(i) Standard rated supplies.
(ii) Zero-rated supplies
(iii) Exempt supplies.
• Explain the VAT implications of these categories for the entity.
E3. Input Tax Deductions
• Collect data on and analyse the main expenditure (capital and revenue) incurred by
the entity, and determine which expenditure/expenses can have input tax claimed
and which ones are prohibited.
E4. Returns & Due Dates
• Discuss any other VAT compliance obligations that the entity should comply with if
registered. State the return, and its due date.
• Also fill in a sample return or extract (subject to the availability of the information
from the entity).
E5: Comparative Analysis & Recommendations
• Based on your findings and analysis above, compare what the entity is currently doing
with regards to tax compliance and what it should be doing and make any necessary
recommendations.
Submission Guidelines
1. Group Assignment & Report
 Prepare a report to document your findings and recommendations above. The report
should be submitted as a pdf document. Submission is to be done through CUT VLE and
email to emuguti@cut.ac.zw. For the email submission, the subject should clearly state
the Group number and the entity. For the CUT VLE submission this should be clearly
stated in the title/name of the document. The complete list of group members who
participated should be provided (Names and reg numbers).
Font & Formatting; Trebuchet MS, 12, 1.5 line spacing.

2. Group Presentation
Prepare a PowerPoint presentation to report your findings and recommendations above.
Each group will be allocated time to present on a date to be advised. After presentation,
the corrected ppt should be submitted through CUT VLE and email to
emuguti@cut.ac.zw. For the email submission, the subject should clearly state the
Group number and the entity. For the CUT VLE submission this should be clearly stated in
the title/name of the document. The complete list of group members who participated
should be provided (Names and reg numbers).

Group Entity Allocations

Group 1: CUT Hotel

Group 2: CUT-Kleen
Group 3: CUT Cattle Breeding
Group 4: CUT Farm Crop Production
Group 5: CUT Dairy
Group 6: CUT Farm Piggery & Poultry
Group 7: CUT Block Lick