ZIMRA Announces 2023 Exchange Rates For Income Tax Purposes
The Zimbabwe Revenue Authority (ZIMRA) has announced the exchange rates for the purposes of income tax in 2023.
In a notice seen by Pindula News, ZIMRA said the exchange rates for income tax for the second to the fourth quarter of 2023 will be announced in due course. Read the notice:
2023 EXCHANGE RATES FOR INCOME TAX PURPOSES
Section 37AA of the Income Tax Act [Chapter 23:06] requires taxpayers to submit separate returns where any part of income from trade or investment is earned in foreign currency.
The mentioned section indicates that for the purposes of conversion of allowable deductions exchange rates be used as follows —
(a) in the case of a person making Quarterly payments of Provisional Tax, of use the average auction rate of exchange during the quarter concerned;
For the First Quarter 2023, the average exchange rate is as follows:
AVERAGE AUCTION RATE OF EXCHANGE DURING THE QUARTER
QI 2023……………….. 808.709
Q2 2023 ……………….. TBA
Q3 2023……………….. TBA
Q4 2023 ……………….. TBA
ZIMRA could not give exchange rates for the second to the fourth quarter since the Zimbabwean dollar has had a history of instability since the early 2000s.
The government tried to stabilize the economy with currency reforms, but they were not successful. In 2009, Zimbabwe officially abandoned its currency and switched to using foreign currencies.
The government reintroduced the Zimbabwean dollar in 2019 but it is facing similar problems due to economic challenges and inflation. Many people and businesses prefer using foreign currencies or other forms of exchange.
Income Tax in Zimbabwe:
Income tax in Zimbabwe is a tax levied on individuals and companies by the Zimbabwe Revenue Authority. Individuals are taxed on a sliding scale based on their income, while companies are taxed at a flat rate of 24%. It’s always advisable to consult with a tax professional for up-to-date information on Zimbabwe’s tax laws.