Allowable deductions from farming income

There are quite a number of people who trade or do farming business in Zimbabwe.

These farmers are required at law to declare their income in tax returns and to account for the tax due, if any.

In calculating the tax due, the farmers are permitted to deduct the amounts listed below from their gross income in order to determine the taxable income.

Who is a farmer for Income Tax purposes?

Farmer means any person who derives income from pastoral, agricultural or other farming activities, including any person who derives income from the letting of a farm.

General Expenditure

The following are some of the general expenditure items allowable as deductions:

Employee salaries and wages;

Cost of seeds, fertilisers and chemicals;

Cost of animal feeds;

Cost of acquisition of stocks;

Fuel, electricity, and water expenses;

Motor vehicle and machinery repairs;

Capital allowances;

Selling expenses;

Administration expenses.

Special Allowable Deductions

The following are some of the special allowable deductions in determining taxable income for farmers:

1. Tobacco levy paid during the year of assessment.
2. Any expenditure incurred during the year of assessment on:
3. a) the stumping and clearing of lands;
4. b) works for the prevention of soil erosion;
5. c) the sinking of boreholes and wells;
6. d) aerial and geophysical surveys;
7. e) any water conservation work and any amounts paid by the farmer towards the cost of any water conservation work done by any other person for which such farmer has become liable;
8. f) fencing;
9. An allowance in respect of cost of restocking herd depleted by drought or epidemic diseases.

Prohibited Deductions

The following expenditure items are not allowable as a deduction:

1. a) The cost incurred by any taxpayer in the maintenance of himself, his family;
2. b) Private expenses;
3. c) Travelling expenses between home and workplace;
4. d) Income Tax paid or payable;
5. e) Intermediated Money Transfer Tax paid or payable;
6. f) Private accommodation rental expenses;
7. g) Entertainment expenses;
8. h) Expenditure on leasing a passenger motor vehicle;
9. i) Depreciation;

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.  

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