ZIMBABWE

TAXATION SYSTEM

(d) Goods and services tax

Sales tax is levied under The Sale Tax Act on the sale of value of goods and services sold by registered operators, auctioneers and motor dealers in the normal course of business, and on the value of goods sold by private sale where that sale is discounted by a finance agent. Registered operators are required to remit, on the last day of every month, payment of sales tax in respect of all sales in the preceding month.

Rates of sales tax

• 25% for luxury goods, motor vehicles and a variety of office equipment.
• 15% for consumable and services including hotel accommodation.
• 5% for the supply of electricity by the Zimbabwe Electricity Supply Authority.

Exemptions from sales tax

• Sale by a farmer of unprocessed agricultural produce.
• Sale by a miner of minerals.
• Sale between registered operators of goods intended for resale, raw materials for further processing and packaging materials.
• Sale of prescribed goods e.g. raw, dried or smoked foodstuffs, spirits, various tobacco products.

The Minister of Finance has announced his intention to replace the current sales tax system with a Value Added Tax (VAT) system of taxation on the supply of goods and services. The intended date of implementation is not yet known, although it is not expected to be in place before March 2001.