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Withholding tax is the income tax withheld from the employees wages and paid directly to the
government by the employer and the amount withheld is a credit against the income taxes the
employee must pay during the year.
Section 80(23)6 of the income tax states that the legal requirement is that the 10%withholding tax is
deductible from all amounts payable to all who enter into contract with the state or a statutory board
,quasi government institution and taxpayer who are registered with the Zimra unless the payee
furnishes the paying officer with a tax clearance certificate.
It can also be deducted at source ,especially one levied by some countries on interest or divide paid to
a person resident outside that country.
Prevent dry spells in the fiscal standing of the government by providing stabilized cash flows
throughout the taxable year.
1b.
- 10% for
dividends from
Non Residents Within 15 days of the date securities listed on
Shareholders' Tax of distribution stock exchange
- 15% for other
dividends