The Zimbabwe National Chamber of Commerce (ZNCC), an umbrella body for businesses mainly in the commercial sector, has called for a number of tax relief measures to cushion corporates against the destructive impact of Coronavirus Disease COVID-19.
The country is currently on an extended lockdown to curb the spread of the deadly pandemic, which has infected over two million and claimed thousands of lives globally.
There are 32 confirmed cases of COVID-19 in Zimbabwe including four deaths.
The initial 21-day lockdown which began on March 30 was extended by a further 14 days to May 3.
Most businesses have remained closed since March 30 to date and have not generated any income for a period of one month.
The call for tax relief measures comes at a time when Finance Minister Mthuli Ncube is set to soon announce a stimulus package for industry.
“Government should consider exempting businesses from paying PAYE (Pay As You Earn) for the month of April given that the month has not been a productive month due to the total lockdown,” said ZNNC in a recently published report.
“Government needs to consider temporary removal of employment taxes/levies.”
The business lobby group said the powers-that-be should consider relaxing import duty on raw material imports for the three quarters up to the end of 2020 to cushion producers and manage imported inflation taking into account that trade has been affected by the COVID-19 pandemic.
“Paying all outstanding VAT (Value Added Tax) Refunds will give businesses the needed liquidity to boost working capital during the COVID-19 period,” said ZNCC.
“There is need to move the payment due date for March VAT from 25 April to the end of May given that Businesses did not manage to collect cash due to the total lockdown. There is need to review the standard VAT rate from 14.5% to 13.5% in order to stimulate aggregate demand.”
ZNCC said there was also a need for a zero-rate VAT for all essential products during the time of COVID-19 pandemic, such as staple foods items, soaps, disinfectants, sanitizers, water, electricity and others, adding that would make essential products affordable to citizens.
On Corporate Income Tax Rate, ZNCC suggested: “There is need to revise downwards the corporate income tax rate from 24% to 20%. This will enable businesses/companies to have funds which can be invested back to the businesses to boost the working capital in order to sustain businesses.”
The government, ZNCC said, needs to consider granting an extension to businesses in filing their tax returns (Value Added Tax, PAYE, Excise Duty and Withholding Tax).
“This will give relief to businesses which would not be able to meet their tax filing obligations as per the period specified in the law, as they struggle to mitigate the impact of COVID-19 pandemic,” said ZNCC.
The business lobby entity added it was important for the government to lower taxes on voice, SMS and data services to encourage the use of digital payments.
“This will enable citizens to use the services while carrying out financial transactions,” added ZNCC.