SECTION

EXPLANATION

Sect 16 (1) (a)

The cost incurred by any taxpayer in personal maintenance, his family or establishment.

Sect 16 (1) (b)

Domestic or private expenses of the taxpayer, including expenses incurred in travelling between his home and the place at which he carries on a trade and, in the case of a taxpayer who carries on two or more trades which are distinct in nature, between the places at which such trades are carried on.

Sect 16 (1) (c)

Any loss or expense which is recoverable under any insurance contract or indemnity.

Sect 16 (1) (d)

Tax upon the income of the taxpayer or interest payable there- on, whether charged in terms of this Act or any law of any country whatsoever. The tax categories that a registered operator may be liable to remit include but are not limited to:

1. Income Tax
2. Pay As You Earn
3. Value Added Tax
4. Capital Gains Tax
5. Carbon Tax
6. Presumptive tax.
7. Non-resident shareholders’ tax.
8. Resident shareholders’ tax.
9. Non-residents’ tax on fees.
10. Non-residents’ tax on remittances.
11. Non-residents’ tax on royalties.

Sect 16 (d) (1)

Any amount of Intermediated Money Transfer Tax charged in terms of section 22G of the Income Tax Act.

Sect 16 (1) (h)

Interest which might have been earned on any capital employed in trade.

Sect 16 (1) (i)

The rent of, or cost of repairs to, or expenses incurred on, any premises not occupied for trade, or of any dwelling or domestic premises except in respect of such part as may be occupied for the purposes of trade.

Sect 16 (1) (j)

The cost of securing sole selling rights.

Sect 16 (1) (k)

Passenger Motor Vehicle leasing cost excess: Amounts, in excess of $100,000 paid for leasing a “passenger motor vehicle” (as defined in the Fourth Schedule of the Income Tax Act (Chapter 23:06)) where the lease was entered into on or after 1st January 1999.

Sect 16 (1) (l)

The cost of any shares awarded by the company to an employee or director. This prohibition would counter any claim for a deduction by a company in respect of either an issue of its own share or, an award of shares in another company (for related companies).

Sect 16 (1) (m)                        

Expenditure incurred on entertainment, whether directly or by the provision of an allowance to any employee, including a director. “Entertainment” is defined as including “hospitality” in any form” A deduction is therefore clearly precluded in respect of the cost of, for example, a lunch for business associates, despite the host’s purpose being the furtherance of trade relationships

Sect 16 1(n)

Expenditure incurred in the production of any income arising from stocks or shares of any company. Dividends from foreign companies, which are liable to income tax in the hands of a taxpayer ordinarily resident in Zimbabwe, are taxable (at a flat rate; without any deduction for related expenditure.)

Sect 16 1 (o)

Expenditure incurred in the production of interest on any loan or deposit with local financial institution

Section 16 (1) r

The prohibited deduction applies to the general administration and management fees paid by a subsidiary or holding company or a local branch (where the parent is a foreign company engaging in local mining operations).

Section 16(s) interest

Any interest expenditure incurred on foreign loans in excess of the interest that would have been payable had the exchange rate used to purchase the foreign currency needed to service the interest on the loan been the same exchange rate as that ordinarily offered to other clients of the financial institution providing or mediating the loan on the date of the transaction in question.”