The Zimbabwe Revenue Authority will soon start taxing churches with business ventures, but exclude tithes, offerings and donations from taxation. Churches will also be required to remit “Pay As You Earn” for their employees’ salaries, wages and allowances.
Zimra head of corporate communications Mr Canisio Mudzimu said, “Churches carrying out business are treated like any other entity and are liable to income tax which is payable on business profits, i.e. income derived from, or deemed to be from a source within Zimbabwe.
“However, the receipts and accruals of church or religious organisations are exempted from income tax only to the extent of donations, tithes, offerings, other contributions by its members, and any other income that is not from trade or investments.
“Every person who becomes an employer is required by law to register for PAYE within 14 days of becoming an employer. Once a church becomes an employer and it pays any type of remuneration, for instance, a salary, wage, allowance — among others — to its employees, the church will be required to deduct the correct employees’ tax or PAYE every month, in accordance with the tax tables, and remit to Zimra by the 10th day of the following month.”
Mr Mudzimu also said, “Capital gains tax is payable on capital gains realised from the sale of specified assets (immovable property, shares and other securities). It should be stated that a church is exempt from capital gains tax in respect of any sale of specified assets.
“However, the exemption does not cover a situation where the church carries on a trade through a company or other statutory corporation and the latter sells a specified asset. . . Please note that any business transaction carried on by any pastor and founder of any church is liable to tax.”