Tax Clearance Tips by Shaphat Business Consulting Episode 1


What is a Tax Clearance Certificate (ITF263) in Zimbabwean corporate tax context and how do you get one?

A lot of startups and small businesses in the past have engaged tax and business consultants that have failed to explain or neglected to educate clients on the meaning of a tax clearance certificate. In some instances it has to do with the consultant’s lack of tax knowledge or the client’s tax delinquency. In this short article we will explain what a tax clearance certificate is. In Episode two of tax clearance tips we are going to shade light on how you conquer the first step of the three factors highlighted below.

A tax clearance certificate ,commonly known as an ITF263 simply refers to a document that indicates a tax payer’s status . If you are cleared by the tax authority being ZIMRA, it means that your tax position is satisfactory. A satisfactory tax position is premised on the three factors emphasized below;

1. You have properly registered your business for the following;

  • A ZIMRA Business Partner Number.
  • A ZIMRA E-services Account.
  • Relevant tax heads e.g. PAYE, Income Tax, VAT or Withholding Taxes.

2. You have prepared schedules such as invoices, journals, payroll, management accounts, sales and VAT schedules to support and complete monthly, quarterly and annual returns for your subscribed tax heads.

3. You must have filed returns on time and in the correct currency .Secondly you must have paid your obligations on time in the correct currency if applicable. Sometimes you may be making a tax loss hence no need to pay anything. You need a competent tax accountant to prove the validity of your assessed tax loss or tax refunds. It is critical to note that accounting profit ,cash flow positive and tax profit are different things. Most small businesses think that having money in the cash box simply means they have to pay taxes.

If you have ticked the boxes for the three points above, we are sure the ZIMRA e-filling algorithm will smile at you and spoil you with a 12 months tax clearance or ITF263 for the 2022 tax year.

Constantly visit ZIMRA website for tax knowledge, recent notices and announcements. I hope this article will help you guys to take corrective actions preparing for your 2021 & 2022 ITF 263s. In God we trust. Get in touch with me on either 0718 080 008 or 0780 449 933 or ,if you need help to set up your own business tax and accounting function. This will also smoothen your tax compliance and other statutory compliance requirements such as PRAZ, NSSA, ZIMDEF, SDL and ZTA.

Holderness Magaragada CA (Z), RPAZ, MCAWN

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