Mthuli Ncube want Online companies to pay tax

By Staff writer | 25 Nov 2018 at 19:46hrs
Mthuli Ncube
ZIMBABWE'S Finance Minister Mthuli Ncube bemoaned the fact that foreign operators are taking advantage of technology to provide services to local individuals and thus generate income from Zimbabwe but are not being made to pay tax on it.

Presentation the 2019 budget the Finance Minister said the "technological advancements have enabled foreign companies, particularly satellite broadcasters and e-commerce platforms to provide local residents with services from offshore sources."

This income is subject to tax and the activity generating the income is actually paid from a source within Zimbabwe.

"For the avoidance of doubt and in order to broaden the tax base, I propose to deem income earned by such non-resident service providers to be from a source within the country and liable to tax."

Zimbabwean tax is supposed to be paid on Taxable Income earned from income generated when one is in Zimbabwe.

Technically, these companies are not really in Zimbabwe and as they have no physical presence here. They have foreign domain name TLDs such as .com and are hosted on foreign servers.

It is galling that technology has allowed these companies to have a sizeable market share without ever setting foot here.

It is worthwhile to note that companies like Amazon et al collect VAT/Sales Tax in Europe and the U.S but Zimbabwean customers are exempt from this VAT/Sales Tax.

Taxing foreign online companies will only work if you have leverage and Zimbabwe has very little of that right now.



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