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Treasury Announces Guidelines for Second Quarter Corporate Income Tax Payments

By Wilis Moyo

Harare, Zimbabwe – The Treasury has issued a statement outlining the guidelines for the payment of second quarter Corporate Income Tax, amid the country’s transition to the Zimbabwe Gold (ZiG) currency.

According to the statement, the payment of Corporate Income Tax will be guided by the provisions of Section 4A of the Finance Act, which requires payment in the equivalent proportion of the currency of trade. However, Treasury has granted authority for corporates to account for their 2024 Second Quarter Corporate Income Tax obligations in both local and foreign currency on a 50:50 basis.

The statement also clarified that businesses and the general public have the option to pay Government fees and charges in local currency, unless specified otherwise. Additionally, customs duty on imported goods is payable in local currency, except for designated foreign currency dutiable non-essential or luxury products.

The Treasury is currently reviewing the Framework of Tax Payments to ensure a seamless transition to the new currency, align legislative requirements, set ratios for transactions in local and foreign currency, and minimize economic shocks. The review will also specify taxes payable exclusively in local currency, with supportive legislation to be approved by Parliament.

This move aims to maintain the country’s positive economic trajectory, anchored by the new Zimbabwe Gold currency, which has ushered in a more stable economic environment.

Since the introduction of the Zimbabwe Gold (ZiG) currency, the economy has shown signs of relative stability, with a slowdown in hyperinflation and a gradual restoration of confidence in the local currency. The ZiG has been pegged to a basket of currencies, reducing volatility and attracting foreign investment. While challenges persist, the economy has witnessed a moderate upswing, with improved liquidity, increased industrial production, and a boost in agricultural output. However, the full impact of the new currency remains to be seen, and the government’s efforts to maintain a stable exchange rate, control inflation, and address structural issues will be crucial in determining the sustainability of this economic recovery.

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