WHAT IS A TAX RETURN?
A tax return is a documentation fully completed that shows the amount of tax liability, submitted in paper or online to ZIMRA together with full details of the tax payer on or before specified date. The said return is then used by Zimra to assess liability of the taxpayer. These differ in terms of the tax head of the return being submitted to such as Paye return, Vat Return, Capital Gains Tax Return among other returns. The Tax return is designed in such a way that, it allows the taxpayer to calculate tax-liability and tax payments. The returns are then submitted on ZIMRA online platform called ZIMRA Eserices; the system automatically calculates the tax liability and payments and it came as a panacea to reduce frequent visit to the tax authority.
IMPORTANCE OF RETURNS SUBMISSION
a) Filing returns is mandatory
Filing of returns in a Zimbabwean context is mandatory to the extent of taxpayer’s registration. The taxpayer is obligated to file returns of the tax heads registered failure of which will result in excessive interest and penalties or even litigation. As they say “ignorance of the law is no defence”. Taxpayers are expected to know the implications of not submitting returns as they should. Most of these costs can be avoided because they negatively impact on the cash flows of businesses and the taxpayer’s reputation.
b) Filing returns is a sign you are responsible
The government mandates that taxpayers who are registered with ZIMRA must submit income tax return on or before 30 of April of subsequent year of assessment. The tax as calculated must be paid and failure to pay will invite penalties and interests. Upon submission of the returns, the taxpayer must keep the copy of it as evidence for future audits. Tax is a major source of revenue hence filing returns and making payments on time ensures the availability of public goods and services being funded by responsible tax payers.
c) Adjustment or Refunds processing
Filing returns has many advantages regardless of whether you draw the prescribed level of income necessary to file returns. In circumstances where taxpayer wants to claim a refund, it could be denied where the taxpayer fails to furnish the commissioner with the requested information by the officer responsible for auditing the refund.
d) Tax Audits
Returns are vital during audits and they show what really transpired during the period in question. They play a vital role in giving evidence of taxpayer’s defence.