Al­low­able de­duc­tions for do­na­tions in the de­ter­mi­na­tion of tax­able in­come

The Manica Post - - Farming/Business -

Busi­nesses and in­di­vid­u­als of­ten make do­na­tions to meet their Cor­po­rate So­cial Re­spon­si­bil­ity (CSR) goals or just out of good­will. Do­na­tions by their na­ture are not in­curred for the pur­poses to fur­ther trade and nei­ther are they in­curred for pro­duc­ing in­come but out of com­pas­sion or pas­sion. Hence, some of them are not al­lowed as a de­duc­tion for tax pur­poses.

HOW­EVER, the law pro­vides for the de­duc­tion of cer­tain do­na­tions un­der pre­scribed con­di­tions. The law stip­u­lates the cir­cum­stances and con­di­tions in which do­na­tions are al­lowed as de­duc­tions and the max­i­mum amounts al­lowed. The do­na­tions re­ferred to by the law should be free con­tri­bu­tions made with­out any con­sid­er­a­tion what­so­ever. Do­na­tions made by the tax­payer, dur­ing the year of as­sess­ment, to:

◆ The Na­tional Schol­ar­ship Fund

◆ The Na­tional Bur­sary Fund

◆ A char­i­ta­ble trust ad­min­is­tered by the Min­is­ter re­spon­si­ble for So­cial Wel­fare or the Min­is­ter re­spon­si­ble for Health. Do­na­tions made by the tax­payer dur­ing the year of as­sess­ment, to the State or to fund any one of the fol­low­ing pur­poses ap­proved by the Min­is­ter re­spon­si­ble for Health:

◆ pur­chase of med­i­cal equip­ment for a hospi­tal op­er­ated by the State, lo­cal au­thor­ity or re­li­gious or­gan­i­sa­tion

◆ con­struc­tion, main­te­nance or ex­ten­sion of a hospi­tal op­er­ated by the State, lo­cal au­thor­ity or re­li­gious or­gan­i­sa­tion

◆ pro­cure­ment of drugs to be used by a hospi­tal op­er­ated by the State, lo­cal au­thor­ity or re­li­gious or­gan­i­sa­tion

The max­i­mum al­low­able de­duc­tion for this type of do­na­tion is US$100000.

Do­na­tions made by the tax­payer, dur­ing the year of as­sess­ment, to a re­search in­sti­tu­tion ap­proved by the Min­is­ter re­spon­si­ble for Higher and Ter­tiary Ed­u­ca­tion. This de­duc­tion is also lim­ited to a max­i­mum of US$100 000. Do­na­tions made by the tax­payer dur­ing the year as­sess­ment, to the State or to fund any one of the fol­low­ing pur­poses ap­proved by the Min­is­ter re­spon­si­ble for Ed­u­ca­tion:

◆ pur­chase of ed­u­ca­tional equip­ment for a school op­er­ated by the State, Lo­cal au­thor­ity or re­li­gious or­gan­i­sa­tion

◆ con­struc­tion, main­te­nance or ex­ten­sion of a school op­er­ated by the State, Lo­cal au­thor­ity or re­li­gious or­gan­i­sa­tion

◆ pro­cure­ment of books and other ed­u­ca­tional ma­te­ri­als to be used in a school op­er­ated by the State, Lo­cal au­thor­ity or re­li­gious or­gan­i­sa­tion

This de­duc­tion is also lim­ited to a max­i­mum of US$100 000.

Do­na­tions made by the tax­payer dur­ing the year of as­sess­ment, to the Pub­lic Pri­vate Part­ner­ship Fund. This de­duc­tion is lim­ited to a max­i­mum of US$50 000. Do­na­tions made by the tax­payer, dur­ing the year of as­sess­ment, to the Des­ti­tute Home­less Per­sons Re­ha­bil­i­ta­tion Fund (Fund es­tab­lished un­der the Min­istry of Fi­nance). This de­duc­tion is also lim­ited to a max­i­mum of US$50 000.

NB: It is im­por­tant for our val­ued clients to note that the bur­den of proof as to whether a do­na­tion has been ap­proved or not rests with the tax­payer.

◆ Dis­claimer This ar­ti­cle was compiled by the Zim­babwe Rev­enue Au­thor­ity for in­for­ma­tion pur­poses only. ZIMRA shall not ac­cept re­spon­si­bil­ity for loss or dam­age aris­ing from use of ma­te­rial in this ar­ti­cle and no li­a­bil­ity will at­tach to the Zim­babwe Rev­enue Au­thor­ity. To con­tact ZIMRA: What­sApp line : +263 782 729 862 Visit our web­site : www. zimra.co.zw Fol­low us on Twit­ter : @Zim­ra_11 Like us on Face­book : www.face­book.com/ZIMRA.11 Send us an e-mail : pr@zimra.co.zw/ web­mas­ter@zimra.co.zw Call us (Head Of­fice): 04 –758891/5; 790813; 790814; 781345; 751624; 752731 e-TIP : http://ecus­toms. zimra.co.zw/etip/

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