The Zimbabwe Revenue Authority (Zimra) has revealed that it will soon start collecting taxes from churches which engage in commercial business. This comes as a number of churches, particularly Pentecostal churches are selling various items such anointed oil, anointed bracelets, anointed water, discs, etc. However, the revenue collector made it clear that it will not be taxing tithes, offerings, and donations. Churches will also be required to pay Pay As You Earn (PAYE) for salaries, wages, and allowances to any of their workers.
Zimra head of corporate communications Mr. Canisio Mudzimu said:
Churches carrying on businesses are treated like any other entities and are liable to Income Tax. This tax is payable on business profits, which is income derived from, or deemed to be from a source within Zimbabwe.
However, the receipts and accruals of church or religious organisations are exempt from Income Tax only to the extent of donations, tithes, offerings, other contributions by its members, and any other income that is not from trade or investments.
Every person who becomes an employer is required by law to register for PAYE within 14 days of becoming an employer. Once a church becomes an employer and it pays any type of remuneration, for instance salary, wage, allowance — among others — to its employees, the church will be required to deduct the correct Employees’ Tax or PAYE every month, in accordance with the tax tables, and remit to the Zimra by the 10th day of the following month.
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