Youth employment tax incentive explained

10 Jul, 2020 - 00:07 0 Views
Youth employment tax incentive  explained

The ManicaPost

According to the Finance Act 3 of 2019, Youth Employment Tax Incentive is defined as an incentive to employers intended to stimulate creation of employment.

The employers will be eligible to claim a credit against their taxable income. The credit is claimable with effect from 2020 year of assessment.

When is the credit claimed?

It is claimed on completion of Income Tax return.

How much is the tax credit?

The tax credit is $500 per month for each additional employee aged 30 years and below, up to a maximum of $60,000 per year of assessment (for all employees) to taxpayers’ subject to certain conditions.

What are the conditions?

  1. The company should be a registered taxpayer and compliant for the preceding year of assessment.
  2. Tax credit will only be claimed after the additional employee has served a period of 12 consecutive months and should be earning at least $2000 or more per month.
  3. The tax credit will not apply to companies or trusts whose annual turnover is equal to or exceeds an equivalent of US$1 million.
  4. The Commissioner shall not refund any excess credit if the credit exceeds the tax payable during the year of assessment. This means that the credit is not carried forward to the next year of assessment.
  5. Where the taxpayer has an assessed loss during the year of assessment, the credit shall be added to the assessed loss and the amount is carried forward to the next year of assessment.

NB: For the purposes of this credit, employee excludes a trainee, intern, apprentice and a managerial employee. Managerial employees include supervisors as well.

Outstanding returns

Also note that all taxpayers with outstanding returns, for previous tax periods, are reminded to submit without further delay.

Payments

All payments for taxes should be remitted on time through banks. Please be reminded that where transactions are in foreign currency, taxes shall also be remitted in foreign currency.  Refer to the following link on ZIMRA website for ZIMRA Bank Accounts details: https://www.zimra.co.zw/profile/2037-zimra-bank-accounts

My Taxes, My Duties: Building my Zimbabwe!!

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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