ZIMRA 2017 REVENUE FOCUS AREAS COLLABORATED SEMINAR BETWEEN ICAZ AND ZIMRA 26 JANUARY 2017 RAINBOW TOWERS

Transcription

1 ZIMRA 2017 REVENUE FOCUS AREAS COLLABORATED SEMINAR BETWEEN ICAZ AND ZIMRA 26 JANUARY 2017 RAINBOW TOWERS

2 ZIMRA S MANDATE The Authority s mandate is derived from Section 4 of the Revenue Authority Act (Chapter 23:11) where the Acts administered by ZIMRA are:- Capital Gains Tax Act (Chapter 23:01) Customs and Excise Act (Chapter 23:02) Finance Act (Chapter 23:04) Income Tax Act (Chapter 23:06) Stamp Duty Act (Chapter 23:09) Value Added Tax Act (Chap 23:12) The Authority also enforces legal provisions, by extension from other Government Ministries & Bodies

3 VISION & MISSION STATEMENTS VISION To be a beacon of excellence in the provision of fiscal services and facilitation of trade and travel. MISSION To promote economic development through efficient revenue generation, collection and trade facilitation. VALUES Integrity, Transparency and Fairness

4 ZIMRA SPREAD in ZIMBABWE

5 WHAT ZIMRA HAS DONE ZIMRA s initiatives under both Customs & Excise and Domestic Tax:- Automation of systems and procedures Upgrade of Systems already in place Simplification of procedure (internal & external clients) Internal skills development and capacity building Client education Stakeholder engagement

6 AUTOMATION & OTHER INITIATIVES UNDER CUSTOMS & EXCISE ASYCUDA World upgrade (imports and exports declaration processing) Web based direct trader input (DTI) Centralized declaration procession (24/7 Data Processing Centers - DPCs) Non-intrusive cargo/goods inspection systems (NIIT Non-Intrusive Inspection Technology) Canine (K9) unit Biological NIIT (sniffer dogs) X-ray baggage and cargo scanners at ports of entry (borders posts & airports) Border Efficiency Management Systems (BEMS) Cargo tracking

7 BORDER EFFICIENCY MANAGEMENT SYSTEMS (BEMS) Initiatives to decongest border posts (esp. the busy ones) Improve efficiency on border processes Traffic segregation and separation Single window concept Extended hours of operation at selected ports of entry Removal of processes considered trade barriers Establishment of transit sheds, bonded warehouses, transit bonds One Stop Borders Post concept (OSPB) Simplified Trade Regime (STR)

8 Pre-clearance procedures BORDER EFFICIENCY MANAGEMENT SYSTEMS(BEMS) cont d Cargo escorts (expedited controlled delivery) Authorized economic operators (AEO) concept Post clearance audits (PCA) at inland ports Advance cargo manifest and information exchange Risk management principles for selectivity Liaison with other state agents and bodies (JOC, ZRP,OPC) Mutual Administrative Assistance agreements with Customs Administrators in adjacent countries

9 AUTOMATION & OTHER INITIATIVES UNDER DOMESTIC TAXES SAP TRM System upgrade E- registration E-filing E-banking Self-assessment Invoice Management (Fiscalisation) Establishment of client call centers Client segmentation Satellite offices for ease of accessibility Client contact through internet and ZIMRA website

10 OTHER ZIMRA CLIENT FOCUSED INITIATIVES Establishment of industry/sector specific liaison officers ZIMRA to Business forum Tax payer appreciation initiatives Conduction of workshop & client education across the country Participations at exhibitions and other trade forums Focused corporate social responsibility initiatives Embrace of best practice and sound corporate governance ISO Certification and Quality Policy (improvement of service delivery) Other modernization projects across the organization s divisions Current tax amnesty for SMEs who register before 30 June 2017

11 COMPLIANCE Compliance is a critical component of taxation voluntary compliance Non compliance may lead to delays in processing of (customs or taxes) declarations submitted by clients attract penalties and interest. Examples of common non-compliance issues are: Failure to register for tax purposes Lack of or poor record keeping Failure to remit taxes Delayed tax remittances Non submission of tax returns or delayed submission Failure to fiscalise operations False declarations/incomplete declaration/tax Evasion Externalization of income/profits

12 DOUBLE TAX AGREEMENTS AND PROVISIONS THEREIN DTAs apply only to residents of one of the treaty states or both as such third parties cannot benefit therefrom. Absence of treaties could lead to tax treaty shopping i.e. artificial creation of an entity in another state with the main or sole purpose of obtaining treaty benefits which would not be available directly to such a person. Permanent Establishments, With Holding Taxes,

13 DTAs & ASSOCIATED POTENTIAL RISK DTAs apply only to residents of one of the treaty states or both as such third parties cannot benefit therefrom. Absence of treaties could lead to tax treaty shopping i.e. artificial creation of an entity in another state with the main or sole purpose of obtaining treaty benefits which would not be available directly to such a person.

14 BASE EROSION & PROFIT SHIFTING (BEPS) Refers to tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity, resulting in little or no overall corporate tax being paid. Fifteen actions to equip governments with the domestic and international instruments needed to tackle BEPS were adopted by OECD countries. Attention will be paid to BEPS issues as RISK to revenue abounds in these matters. BEPS is of major significance for developing countries Africa losses upwards of USD100 billion annually through illicit funds flows, including among other issues BEPS transactions.

15 BEPS ACTION PLANS Action 1: Addressing the Tax Challenges of the Digital Economy Action 2: Neutralising the Effect of Hybrid Mismatch Arrangements Action 3: Designing Effective Controlled Foreign Company Rules Action 4: Limiting Base Erosion Involving Interest Deductions and other Financial Payments Action 5: Countering Harmful Tax Practices More Effectively, Taking into account Transparency and Substance

16 BEPS ACTION PLANS cont. Action 6: Preventing the Granting of Treaty Benefits in Inappropriate Circumstances Action 7: Preventing the Artificial Avoidance of Permanent Establishment Status Actions 8-10: Guidance on Transfer Pricing Aspects of Intangibles Action 11: Measuring and Monitoring BEPS

17 BEPS ACTION PLANS cont. Action 12: Mandatory Disclosure Rules Action 13: Guidance on Transfer Pricing Documentation and Country-by-Country Reporting Action 14: Making Dispute Resolution Mechanisms More Effective Action 15: Developing a Multilateral Instrument to Modify Bilateral Tax Treaties

18 TRANSFER PRICING Transfer pricing - the setting of the price for goods and services sold between controlled (or related) legal entities. MNEs have a lot of scope to misprice, under value or over value transactions to move profits to areas of their choice at non-arm s length thereby shifting profits these are the corner stone activities of transfer pricing. Transfer pricing is one of the BEPS methodologies used to shift profits from one tax jurisdiction to a lower tax jurisdiction.

19 OTHER REVENUE FOCUS AREAS IN 2017 Fiscalisation and linking servers to the ZIMRA Server ITF 263s Harmful Tax Planning and Tax Avoidance Schemes Advance Tax Rulings (ATRs) & Objections With holding Taxes and Double Tax Agreements provisions Remuneration issues VAT Debt recovery & attachments etc. Registration of accountants and tax practitioners SME registration Any other area as deemed necessary

20 CORRUPTION ZIMRA also has in place initiatives to ensure the following:- Zero tolerance to corruption Toll free numbers for clients and good citizens to report corruption Whistle blower facility Pursuit of ill gotten gains and recovery of state dues

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22 THANK YOU