Vatassessments

This lesson introduces the principles, statutory framework, and practical workflows around VAT Assessments in Zimbabwe in Zimbabwe. By the end you will understand the underlying concepts, know which legislation governs the topic, recognise common compliance traps, and be able to apply the rules confidently in real-world taxpayer scenarios.

The statutory structure of VAT assessments in Zimbabwe

Zimbabwe's VAT assessment system sits on three interlocking pillars: the Value Added Tax Act [Chapter 23:12] supplies the substantive assessment powers; the Income Tax Act [Chapter 23:06] supplies imported procedural machinery (interest, dispute, recovery); and the Revenue Authority Act [Chapter 23:11] provides ZIMRA's institutional standing.

1. Value Added Tax Act [Chapter 23:12] — principal assessment provisions

section 6 — the charge. VAT is charged on every taxable supply made by a registered operator in the course or furtherance of trade.

section 28 — submission of returns. Every registered operator must submit a VAT return (Form VAT7) for each tax period (typically monthly), declaring output tax on sales and input tax on purchases. The return is due on or before the 25th day of the month following the end of the tax period. The return is the operator's self-assessment.

section 31 — assessments. The Commissioner may make an original assessment, an additional assessment, or a reduced assessment in defined circumstances. Original assessments arise where the operator has failed to submit a return; additional assessments where the Commissioner is satisfied that an existing assessment / self-assessment is incomplete or incorrect; reduced assessments where the original or additional assessment has overstated the liability.

section 32 — estimated assessments. Where an operator fails to submit a return, the Commissioner may issue an estimated assessment based on available information (including comparable-business benchmarks, prior-period figures, and third-party data).

section 33 — withdrawal or variation of assessment. The Commissioner may withdraw or vary an assessment in defined circumstances, including where the operator subsequently files an accurate return or where new information emerges.

section 34 — finality of assessment. An assessment becomes final and conclusive on:

• expiry of the 30-day objection window without objection
• withdrawal of objection;
• determination of objection / appeal.

section 32(6) — the 6-year time bar. The Commissioner may not issue an additional assessment more than 6 years after the date of the original assessment, except where there is fraud, wilful default, or material non-disclosure (in which cases there is no time limit).

section 38 — payment of VAT. VAT becomes due on the date specified in the assessment notice, or otherwise within 30 days of the assessment.

section 39 — interest on overdue VAT. Statutory interest accrues automatically on unpaid VAT at the prescribed rate from the due date until payment.

section 41 — penalties. Penalties may be imposed for failure to submit returns, late payment, and material under-declaration. Section 41(2) provides for a penalty of up to 100% of the tax shortfall in cases of evasion.

section 32(2) — Commissioner's discretion. The Commissioner may decide what records, returns, or other information to take into account when raising an assessment.

section 48 — agent appointment / garnishee. Mirrors section 58 of the Income Tax Act. Banks, customers, employers, and trade debtors may be appointed as agents of the operator for the purposes of paying outstanding VAT.

section 49 — recovery as a debt due to the State. VAT is recoverable as an ordinary civil debt; the Commissioner may file a certificate with the registrar of any competent court (parallel to section 60 of the ITA).

2. Income Tax Act [Chapter 23:06] — imported objection and dispute machinery

section 32(5) of the VAT Act imports the Income Tax Act objection and appeal procedure mutatis mutandis. Practically:

Section 62 ITA:

• 30-day objection window; detailed grounds required. Section 63 ITA
• burden of proof on the taxpayer to displace the assessment. Section 65 ITA
• appeal to the Fiscal Appeal Court (for VAT
• the FAC has jurisdiction here, distinct from CGT and ITA appeals which go to the High Court / Special Court for Income Tax Appeals). Section 67 ITA
• final and conclusive status. Section 69 ITA
• pay-now-argue-later (lodging an objection does not suspend payment unless the Commissioner directs).

3. Revenue Authority Act [Chapter 23:11]

Establishes ZIMRA, defines the office of the Commissioner-General, and confers the audit and information-gathering powers underpinning estimated and additional VAT assessments. Provides ZIMRA's institutional standing to sue, to issue assessments, and to deploy collection machinery.

4. Tax Administration provisions and supporting instruments

VAT (General) Regulations, 2003 (SI 273 of 2003) as amended — supplies operational rules on the format of tax invoices, the timing of input-tax claims, and procedural requirements for adjustments.

ZIMRA Public Notices. Particularly relevant: Public Notice 56 of 2024 confirming the TaRMS-based clearance and assessment system; voluntary disclosure notices providing penalty mitigation; and periodic guidance on assessment procedure and record-keeping standards.

Statutory Instruments. Periodic SIs adjust rates, apportionment rules, and refund procedures. Practitioners should consult the most recent SI before applying any rate or computational rule.

5. Constitution of Zimbabwe — sections 68 and 298

Section 68 — right to administrative justice; constrains the Commissioner's exercise of assessment, audit, and recovery powers. Section 298 — fairness, equity, and accountability in revenue collection.

6. The Fiscal Appeal Court Act [Chapter 23:05]

Establishes the Fiscal Appeal Court (FAC), the appellate forum for VAT and stamp-duty disputes. Distinct from the Special Court for Income Tax Appeals (which handles ITA and CGT). VAT appeals from a disallowed objection go to the FAC under section 65 ITA (as imported by section 32(5) VAT) read with the Fiscal Appeal Court Act.

Quick statutory map for any VAT assessment dispute

"Is the assessment valid?" → Section 31 (powers); section 32 (estimated); section 32(6) (time bar); RAA (delegation).
"How do I object?" → Section 32(5) VAT importing section 62 ITA:

• 30-day window, detailed grounds. "Do I have to pay first?" → Section 38 VAT + section 69 ITA
• yes, unless suspension granted. "What interest applies?" → Section 39 VAT
• statutory interest from the due date. "What penalties?" → Section 41 VAT
• up to 100% in cases of evasion. "What if I cannot pay?" → Sections 48, 49 VAT
• garnishee and certificate-as-judgment. "Can I appeal?" → Section 32(5) VAT importing section 65 ITA + Fiscal Appeal Court Act
• to the FAC. "Constitutional review?" → Constitution sections 68, 298.

A reduced assessment is essentially a correction or amendment to an earlier assessment that lowers the amount of tax due. This typically happens when a taxpayer challenges an assessment and provides information showing that the original figure was too high. There are a few mechanisms and conditions under which a VAT assessment can be revised downward in Zimbabwe:

Objection Process – Primary Route: The main avenue to get an assessment reduced is by lodging an objection with ZIMRA. Under section 32 of the VAT Act, any person who is dissatisfied with an assessment may object in writing within 30 days of the notice of assessment. The objection should state clearly the grounds – for example, “the sales for Q1 were overstated because an invoice was counted twice” or “input tax disallowed should be allowed as we have receipts”. Upon receiving a valid objection, the Commissioner is obligated to consider the merits. The law explicitly provides that the Commissioner may “reduce or alter the assessment” or may disallow the objection. If the Commissioner agrees (in whole or part) with the taxpayer’s objection, a reduced assessment will be issued reflecting the corrected, lower tax amount. This replaces the previous figure (except for any portion still disputed).

Situations for Reduction: Some common situations where assessments are reduced:

After Estimated Assessments: If a taxpayer files the correct return after an estimate, ZIMRA will reduce the estimated assessment to the true amount. For example, an estimated VAT assessment of ZWL 50,000 might be reduced to ZWL 30,000 when the taxpayer produces books and records showing the actual liability is ZWL 30,000.

Successful Objection with Evidence: If an additional assessment included items that were mistakenly counted as taxable, and the taxpayer can show those items were exempt or zero-rated by law, ZIMRA should reduce the assessed amount. For instance, ZIMRA might have assessed VAT on certain supplies, not realizing the taxpayer had export documentation; upon objection and proof, the assessment would be revised downward to remove VAT on those exports.

Error Correction: Sometimes assessments have clerical errors or miscalculations. Bringing these to ZIMRA’s attention (even informally) can result in a corrected (often reduced) assessment without a protracted dispute.

Procedure and Timeline: A critical aspect of procedural fairness in the objection process is the timeline for ZIMRA’s response. By law, ZIMRA must respond to an objection within 90 days with a determination. The Commissioner’s response can be: allowing the objection in full (assessment reduced accordingly), allowing in part (assessment altered to some intermediate figure), or disallowing the objection (assessment remains). If no response is given within 90 days, the objection is deemed to have been disallowed by operation of law. This provision (introduced via an amendment to strengthen taxpayer rights) ensures that taxpayers are not left in limbo. A deemed disallowance means the taxpayer can then proceed to appeal (as if ZIMRA had formally denied the objection).

Administrative Reduction (Remission): In some cases, especially with penalties or interest, ZIMRA has discretion to waive or reduce amounts outside the formal objection path. For example, if an assessment included a hefty penalty, the taxpayer can request remission of the penalty on grounds of mitigatory factors. While the tax portion would be addressed through objection/appeal, penalty reduction can be an administrative decision. However, any reduction of the principal VAT assessed usually requires the formal objection/appeal process, as ZIMRA cannot just write off tax without basis in the law.

Finality of Reduced Assessment: If an assessment is adjusted and the taxpayer is satisfied (or does not challenge further), that reduced assessment becomes final. According to the VAT Act, once an assessment has been altered or reduced on objection, and if the taxpayer does not appeal that outcome, it is treated as final and conclusive. If the taxpayer is still aggrieved (for example, ZIMRA only partially reduced the amount and the taxpayer believes it should be lower), the next step is an appeal to the Fiscal Appeals Court.

Example (Reduced Assessment): ZIMRA issues an assessment for ZWL 100,000, suspecting undeclared VAT on some sales. The company objects, providing signed contracts proving that half of those transactions were actually exports charged at 0% VAT. Upon review, ZIMRA agrees that ZWL 50,000 of the assessed amount was not taxable. ZIMRA issues a notice of reduced assessment for ZWL 50,000. The company pays this amount. The remaining ZWL 50,000 is effectively cancelled by the reduction. This outcome is documented in ZIMRA’s objection decision letter. (If ZIMRA had disallowed the objection despite the evidence, the company could then appeal to the Fiscal Appeals Court for further reduction or nullification of the assessment.)

Insight: Engaging with ZIMRA early and providing clear evidence can often lead to a reduced assessment without the need for court intervention. ZIMRA’s own guidance emphasizes that the objection process is meant to give taxpayers a “platform for a fair hearing” and can “change [the] tax burden” if the taxpayer’s case is justified. In professional practice, it’s advisable for taxpayers to accompany objections with all supporting documents (invoices, contracts, legal arguments, etc.) to maximize the chances of a favorable revision.

VAT self-assessment, estimated and additional assessment workflows

VAT compliance in Zimbabwe runs through three distinct assessment workflows:

• the standard self-assessment workflow that applies to every periodic return
• the estimated-assessment workflow that ZIMRA invokes when a return is not filed;
• the additional-assessment workflow that follows a successful audit. This section walks through each workflow as it actually unfolds in TaRMS.

Workflow 1 — Standard self-assessment

Step 1 — Periodic compilation. The registered operator captures all sales (output tax) and purchases (input tax) for the tax period (typically monthly). Tax invoices, credit notes, debit notes, and import documentation are reconciled to the underlying accounting records.

Step 2 — VAT7 preparation. The operator completes Form VAT7 in TaRMS, declaring:

• total taxable supplies and output tax
• total taxable purchases and input tax
• any adjustments under section 17 (change-in-use), section 22 (bad-debt relief), or apportionment reconciliation.

Step 3 — Computation of net VAT. Net VAT = output tax − input tax (subject to apportionment). Where input exceeds output, a refund position arises (sections 44 and 45 VAT govern the refund process).

Step 4 — Submission and payment. VAT7 must be submitted on or before the 25th day of the month following the end of the tax period. Payment of any net liability is made through TaRMS to ZIMRA's bank account on the same date. Late submission triggers section 41 penalties; late payment triggers section 39 interest.

Step 5 — TaRMS deemed assessment. The submitted VAT7 functions as a deemed assessment unless ZIMRA subsequently issues an original or additional assessment varying it. Statutory interest and penalties for late payment run from the section 38 due date.

Step 6 — Record retention. Tax invoices, credit notes, source documents, and the working papers supporting the VAT7 return must be retained for at least 6 years (the section 32(6) audit window). For fraud cases the retention is effectively indefinite.

Workflow 2 — Estimated assessment (after non-filing)

Step 1 — Trigger. The registered operator fails to submit VAT7 by the section 28 due date. TaRMS records the non-filing and issues an automated reminder.

Step 2 — Estimated assessment. If the return remains unfiled after the reminder period, ZIMRA issues an estimated assessment under section 32 of the VAT Act. The estimate is typically based on:

• prior-period filings
• third-party data (bank deposits, customer turnover declarations)
• industry benchmarks
• any other information ZIMRA holds.

Step 3 — Notice and 30-day objection window. The estimated assessment is served on the operator (paper or electronic). The 30-day objection window under section 32(5) VAT (importing section 62 ITA) begins on the date of the notice. The estimated assessment is immediately payable (subject to section 69 ITA suspension).

Step 4 — Operator's response. The operator should:

• file the missing VAT7 immediately with full computation
• lodge an objection within 30 days attaching the now-filed return as the documentary basis
• lodge a structured section 69 suspension application for the inflated portion
• engage with the case officer to expedite issue of a corrective assessment.

Step 5 — Corrective assessment. ZIMRA normally issues a revised / additional assessment based on the actual return (under section 31). The original estimated assessment is then withdrawn or amended under section 33.

Step 6 — Penalties. Penalties for late filing under section 41 typically apply even where the corrective assessment is favourable — the late-filing default is a separate basis for sanction.

Workflow 3 — Additional assessment (after audit)

Step 1 — Audit notification. ZIMRA initiates an audit by way of formal notification through TaRMS, requesting specified records, returns and supporting documents for a defined period.

Step 2 — Audit conduct. Audits may be desk-based (records produced electronically) or field-based (ZIMRA officers attend the operator's premises). Audit period typically 4–12 weeks depending on complexity.

Step 3 — Audit findings. ZIMRA issues a draft findings letter setting out proposed adjustments. The operator typically has 14–21 days to respond with explanations and documentary defence.

Step 4 — Additional assessment. If findings are confirmed, ZIMRA issues an additional assessment under section 31 VAT. The notice specifies the under-declared output (or over-claimed input), interest under section 39, and penalty under section 41.

Step 5 — 30-day objection window. Same as estimated assessment workflow — 30 days from the date of the additional assessment notice.

Step 6 — Substantive defence. The operator's defence is heavily documentary. The section 63 ITA burden of proof applies. Tax invoices, supporting workings, contracts, and (where valuation is in issue) registered-valuer reports must be assembled. The objection must specify grounds in detail under section 62 ITA.

Step 7 — Suspension and dispute escalation. section 69 ITA suspension is available on a properly motivated application (H Bank illustrates). If the objection is disallowed, the operator may appeal to the Fiscal Appeal Court within the prescribed window (typically 60 days of the disallowance).

Workflow 4 — Refund-position assessment

Where input exceeds output, the operator's VAT7 generates a refund position. ZIMRA reviews refund claims more strictly than payment positions. Common pre-refund queries:

• verification of zero-rated supplies (export evidence)
• verification of input-tax invoices (genuine, not falsified)
• reconciliation to the operator's accounting records
• verification that the supplier of any large input is a properly registered operator. Refund cashflow is materially slower than payment cashflow — typically 30–90 days for clean claims; 6+ months where queries arise.

The TaRMS audit trail

Every VAT7 submission, payment, assessment notice, objection, suspension application and clearance certificate passes through TaRMS. The TaRMS taxpayer ledger is the master record. Discrepancies between the operator's books and the TaRMS ledger surface immediately in the next assessment cycle. Reconciling the books to TaRMS at every period end is non-negotiable practitioner discipline.

Defensive options for the operator across all workflows

• File on time — most defaults could have been avoided by timely VAT7 submission.
• Pay on time or apply for suspension formally — never assume informal indulgence.
• Retain documentary support for at least 6 years — cannot discharge section 63 burden without it.
• Audit-prepare continuously — assume any return may be picked up for additional assessment within the 6-year window.
• Engage early with case officers — confrontational correspondence rarely improves outcomes.
• Reconcile to TaRMS monthly — surprises in TaRMS become ZIMRA assessments.

The cross-cutting documentary pack

• VAT7 with computational working papers
• Sales day book with tax-invoice numbering
• Purchase day book with supplier-invoice numbering
• Bank statements reconciled to declared turnover
• Apportionment workings (for mixed suppliers)
• section 17 / 22 adjustment workings
• Tax-invoice samples meeting the section 20 / SI 273 of 2003 prescribed format
• Import documentation (Bills of Entry)
• Export documentation for zero-rated supplies
• ZIMRA correspondence and case-officer notes
• Retention discipline — minimum 6 years.

Evidence and burden of proof are fundamental in any tax assessment dispute. In Zimbabwe’s VAT system, as in many tax jurisdictions, the burden of proof lies primarily on the taxpayer to demonstrate that an assessment is wrong or that they are entitled to any exception (exemption, zero-rating, refund, etc.). Both the VAT Act and court decisions underscore this principle:

Burden of Proof on Taxpayer: section 37 of the VAT Act explicitly states that “The burden of proof that any supply or importation is exempt from or not liable to tax, or is zero-rated, or that any amount is subject to any deduction or set-off, or that any amount should be deducted as input tax, shall be upon the person claiming such … and upon the hearing of any appeal, the decision [of the Commissioner] shall not be reversed or altered unless it is shown by the appellant that the decision is wrong.”. In simpler terms, if a taxpayer contends that VAT should not apply (or that they are entitled to a credit/refund), they must prove it. When appealing an assessment, the onus is on the taxpayer (appellant) to demonstrate that ZIMRA’s assessment or decision was incorrect – otherwise the original assessment stands.

ZIMRA’s Assessment as Prima Facie Correct: The law lends considerable weight to ZIMRA’s issued assessments. section 42 of the VAT Act provides that a document from the Commissioner purporting to be a notice of assessment is conclusive evidence of the making of the assessment and, except in an appeal against it, is conclusive evidence that the amount and particulars are correct. This means in any setting outside an appeal, one must accept the assessment as accurate. Even in court, the taxpayer starts under the assumption that the assessment is correct – the court will not overturn it unless the taxpayer produces sufficient evidence to rebut it. An assessment is prima facie valid. The taxpayer’s job is to disprove or adjust it with evidence.

Taxpayer Obligations – Records and Documentation: To meet this burden, taxpayers must maintain and produce proper evidence:

Record Keeping: VAT-registered operators are required by law to keep records of all transactions (sales and purchases) for at least 6 years. This includes tax invoices, receipts, import/export documents, and accounting records. Good record-keeping is not just a legal duty (per section 57 of the VAT Act), but also the practical foundation for defending one’s VAT position. ZIMRA can demand to see these records during audits or when considering an objection.

Documentary Proof for Zero-Rating/Exemptions: If a taxpayer claims a supply is zero-rated or exempt, they must have documentary proof acceptable to the Commissioner to substantiate that claim. For example, to zero-rate an export sale, the business should have export documents (bills of lading, customs papers) proving the goods left Zimbabwe. To claim input tax, one must hold a valid fiscal tax invoice. In the absence of such evidence, ZIMRA and the courts will likely disallow the favorable tax treatment. The VAT Act and regulations often spell out what evidence is needed (e.g. specific documentation for certain zero-rated supplies), and it’s on the taxpayer to obtain and keep those.

Standards of Evidence: In tax disputes, the standard of proof is generally the civil standard – balance of probabilities. The taxpayer doesn’t have to prove their case beyond all doubt, but they need to provide enough credible evidence to convince the ZIMRA objection reviewer or the court that their position is more likely correct than not. This can include books of account, correspondence, expert testimony (for technical points), etc. Example: If ZIMRA assesses an extra ZWL 100,000 of output VAT because of unexplained bank deposits, the taxpayer can meet their burden by producing sales records or explanations showing those deposits were non-taxable (e.g. loan proceeds or zero-rated exports). If they simply say “those weren’t sales” without proof, that will not satisfy the burden of proof – the assessment will be upheld.

ZIMRA’s Role in Evidence: While the taxpayer bears the primary burden, ZIMRA is expected to act on a rational basis. They typically will gather evidence before issuing additional assessments (e.g. bank statements, third-party invoices). If a case goes to court, ZIMRA will present its evidence supporting the assessment (audit reports, schedules, etc.), but the ultimate onus is on the taxpayer to counter that evidence or provide their own. Courts have noted that they will not overturn an assessment unless the taxpayer’s proof clearly outweighs ZIMRA’s claims.

Appeals and Further Proof: If a taxpayer appeals beyond ZIMRA (to the Fiscal Appeals Court or higher courts), no new grounds can usually be raised beyond what was in the objection, but further evidence can be introduced to support those grounds (subject to procedural rules). The appellate court will evaluate all evidence afresh but will still expect the taxpayer to substantiate their arguments. If a taxpayer has no records or poor records, this task becomes very difficult. Tax practitioners often emphasize that “poor record-keeping often weakens a taxpayer’s ability to meet the burden of proof.” If ZIMRA’s assessment was based on best available info and the taxpayer cannot produce better information, the taxpayer is unlikely to prevail.

Burden Shifting in Cases of Fraud/Penalty: One exception to note is if ZIMRA alleges tax evasion or fraud to impose additional penalties (like the 100% additional tax in case of evasion under section 66 of the VAT Act). In such cases, ZIMRA would need to prove the intent to evade (often a higher threshold of evidence) to justify the penalty. The base tax, however, remains the taxpayer’s burden to disprove. For instance, if ZIMRA adds a 100% penalty for evasion, the taxpayer might argue there was no intent. ZIMRA would present evidence of willful default (say, secret ledgers of untaxed sales). If the evidence is weak, a court might waive the penalty even if the underlying tax assessment stands. This is a nuanced area – the main takeaway is that for the tax amount itself, the taxpayer must demonstrate an assessment is excessive or wrong, whereas for penalties the onus may shift to ZIMRA to show aggravating factors like fraud.

Practical Tip: To satisfy the burden of proof, taxpayers should present a coherent, evidence-backed story. This means correlating each contested item in the assessment with proof (invoices, contracts, bank records, etc.) and clear explanations. In a VAT context, this could involve demonstrating that certain transactions were outside the scope of VAT, or that input tax disallowed by ZIMRA was indeed valid (with proper invoices), etc. Both ZIMRA and the courts will look for objective evidence – unsubstantiated claims or wishful arguments won’t carry weight.

Example (Burden of Proof in action): ZIMRA issues an additional VAT assessment on the basis that a retailer suppressed sales (perhaps using an assumed markup on purchases to estimate higher sales). The retailer objects, claiming that the purchases included a lot of waste and that not all inventory was sold. To meet the burden of proof, the retailer provides inventory records, damage reports, and sworn affidavits from an independent auditor confirming the unsold/damaged goods. If this evidence is solid and covers the discrepancy, ZIMRA may reduce the assessment. If the case goes to the Fiscal Appeals Court, the court will examine whether the retailer’s evidence is convincing. If it is, the court may find ZIMRA’s assessment too high and reduce or cancel the additional tax. If the retailer came empty-handed, the court would simply trust ZIMRA’s assessment as reasonable.

Conclusion: In summary, VAT in Zimbabwe is collected through a self-assessment system that relies on taxpayer compliance and honesty, backed by ZIMRA’s oversight and enforcement powers. Estimated assessments protect the revenue when taxpayers fail to file or declare, additional assessments correct understatements or omissions, and reduced assessments ensure that taxpayers are not overcharged when evidence shows the initial assessment was too high. Throughout these processes, the framework of the VAT Act (Cap 23:12) and related Finance Act provisions aim to balance efficiency in tax collection with taxpayer rights to fairness and review. A crucial theme is that taxpayers must be proactive – by keeping meticulous records, filing accurate returns, and promptly engaging ZIMRA if issues arise. Understanding the burden of proof is key: the law requires taxpayers to substantiate their positions, so in any disagreement with ZIMRA, facts and evidence are your best allies.

Challenging ZIMRA Tax Assessments: A Step-by-Step Guide for Taxpayers in Zimbabwe - The David K Law Group

An additional assessment refers to a tax assessment that adds to or increases the tax originally assessed or declared by the taxpayer. These typically arise when ZIMRA discovers that the initial self-assessed VAT was too low – for example, through audits or investigations that uncover undeclared sales, disallowed input claims, or other discrepancies. Key points on additional assessments:

When They May Be Issued: ZIMRA can issue additional assessments whenever it determines that the taxpayer’s VAT liability is greater than what was originally declared. Common scenarios include:

Audit Discoveries: If an audit of the taxpayer’s records reveals under-reported output tax (sales) or over-claimed input tax, ZIMRA will compute the correct amount and issue assessments for the shortfall. For instance, an audit might find that a company omitted certain cash sales from its VAT returns; ZIMRA would then raise assessments for the VAT on those sales for each affected period.

Failure to Register/Backdating: If a business should have registered for VAT earlier than it did (exceeding the threshold but not registering), ZIMRA may register the business retrospectively and issue assessments for past periods. These assessments cover the VAT that should have been charged and paid from the date the business first met the registration requirement. Essentially, this is an “additional” assessment because the taxpayer hadn’t self-assessed at all for those past periods.

Errors in Interpretation: Sometimes a taxpayer may incorrectly treat a taxable item as non-taxable or zero-rated. Upon later review (perhaps triggered by a tax query or court decision), ZIMRA might assess the VAT that was not charged. For example, if a company mistakenly didn’t charge VAT on certain fees believing them exempt, ZIMRA can issue assessments for the VAT that should have been paid.

Legal Backing: The same section 31 of the VAT Act authorizes assessments for underpaid tax. Specifically, section 31(3)(b) allows an assessment if the Commissioner “is not satisfied with any return” – which covers cases of suspected under-declaration – and section 31(3)(c) covers if the Commissioner “has reason to believe” a person has an unpaid tax liability. In such cases, ZIMRA will calculate the additional tax due and issue a formal assessment notice for it. In practice, these are essentially amended assessments that adjust the original self-assessed amount to the correct figure ZIMRA believes is due.

Procedural Fairness and Notice: Just like estimated assessments, additional assessments must be communicated with a written notice stating the amount of additional tax and the period concerned. The taxpayer again has the right to object within 30 days if they disagree. Procedural fairness implies that ZIMRA should base the additional assessment on factual evidence (e.g. bank statements, invoices found, third-party information) and ideally give the taxpayer an opportunity to explain or provide counter-evidence. In many cases, ZIMRA auditors will issue audit findings or engage with the taxpayer before raising the assessment, to ensure that any misunderstandings are cleared – this is a good practice, though the law ultimately allows ZIMRA to assess first and let the taxpayer object after. Zimbabwe’s tax system generally follows a “pay now, argue later” principle – meaning an objection or appeal does not automatically suspend the obligation to pay the assessed tax. (For instance, in one case taxpayers paid the assessed VAT first and then pursued an appeal. The law (formerly section 36, now updated by Finance Act No. 8 of 2022) requires payment of the tax pending an appeal unless arrangements are made otherwise.)

Time Limits (Statutory Prescription): There are limits to how far back ZIMRA can go with additional assessments in normal circumstances. The VAT Act stipulates that if an amount of VAT was not paid due to an honest mistake or a good faith misunderstanding, and not due to intent to evade, ZIMRA cannot recover that tax after 6 years from the date it became payable, provided no assessment for it was made within that 6-year period. The law gives a six-year window for ZIMRA to raise assessments for past deficiencies in the absence of fraud. If the taxpayer’s failure to pay was intentional or due to fraud, this protection doesn’t apply – ZIMRA can go back beyond 6 years. But if the taxpayer simply made an error in applying a zero-rate or exemption in good faith, and ZIMRA only discovers it after six years, the unpaid tax may become unrecoverable by law (unless an assessment had already been issued within those six years). Finance Acts in recent years have not eliminated this taxpayer protection; thus, as of the latest updates, the general 6-year limit (with a fraud exception) still guides the issuance of additional assessments for past periods.

Example (Additional Assessment): A manufacturing company charged 0% VAT on certain supplies for several years, believing they were “zero-rated exports” when in fact the goods were consumed locally (standard-rated). In a 2025 audit, ZIMRA discovers that from 2019–2021 the company under-collected VAT. ZIMRA issues additional assessments for those years, say ZWL 5 million in VAT, plus penalties for evasion if appropriate. These assessments are over and above what the company originally paid. The company can object, but it must provide evidence (e.g. prove the supplies were indeed exports if that’s their claim). If the company’s failure was not willful and is beyond 6 years, they might invoke the 6-year rule. In this example, 2019–2021 is within six years, so ZIMRA is within its rights. The company will likely have to pay the assessed tax for those years unless it successfully proves the supplies were non-taxable. This scenario mirrors real cases where ZIMRA audited past VAT periods and raised assessments for uncollected VAT (for instance, ZIMRA assessed several years of unpaid VAT from a sugar producer who had not charged VAT on certain fees, leading to a large tax bill).

Procedural Fairness Note: After an additional assessment, the taxpayer can use the objection and appeal process (outlined in section 4 and 5) to ensure fairness. The Fiscal Appeals Court is the specialized forum for disputes under the VAT Act. In presenting their case, taxpayers sometimes argue not only the technical tax law, but also whether ZIMRA’s assessment was made on a fair and reasonable basis. However, unless the assessment is shown to be wrong, it will stand (see burden of proof in section 5).

VAT Self-Assessment System in Zimbabwe

Under the self-assessment system, the obligation is on the taxpayer (the registered operator) to determine and remit their VAT liabilities: - Periodic Returns and Payments: VAT returns (Form VAT7) must be completed and submitted for each tax period (often monthly), declaring total taxable sales (output tax) and purchases (input tax). Payment for any net VAT due must be made on or before the 25th day of the month following the end of the tax period. The VAT due is calculated by subtracting input tax from output tax and paying the balance to ZIMRA (or claiming a refund if input tax exceeds output tax). - Taxpayer’s Responsibility: The taxpayer effectively self-assesses their VAT. ZIMRA relies on these self-assessments in the first instance. In practice, the VAT return filed by the operator is considered the taxpayer’s own assessment of tax liability. For example, a retailer will calculate VAT on sales, subtract allowable VAT on purchases, and pay the difference to ZIMRA without ZIMRA pre-auditing that return. - “Trust but Verify” Approach: While taxpayers calculate and pay VAT on their own, ZIMRA may later verify compliance through audits. Zimbabwe’s tax system is based on self-assessment, with ZIMRA conducting audits “from time to time” to verify the information filed by taxpayers. If an audit or review finds anomalies or errors in a self-assessed return, ZIMRA can adjust the assessment by issuing formal notices (as discussed below). This system places initial compliance responsibility on taxpayers, with ZIMRA intervening post facto if necessary.

Example: Suppose Company A, a VAT-registered business, sells goods worth ZWL 1,000,000 in January and has ZWL 600,000 of taxable purchases. Company A must compute the 15% VAT on sales (output tax = ZWL 150,000) and the VAT on purchases (input tax = ZWL 90,000 if those purchases were taxed at 15%). By February 25, Company A files its VAT return showing output tax, input tax, and a net payable VAT of ZWL 60,000 (150,000 – 90,000). Company A pays this amount to ZIMRA. This entire process is a self-assessment – ZIMRA will generally not send any assessment for January unless Company A fails to file or if a later audit finds that these figures were incorrect.

Estimated Assessments by ZIMRA

An estimated assessment is a VAT assessment raised by ZIMRA (the Commissioner) in the absence of a correct self-assessment by the taxpayer. The VAT Act empowers ZIMRA to issue estimated assessments in certain situations, on a “best judgment” basis. Key points include:

When Are Estimated Assessments Issued? According to section 31(3) of the VAT Act, the Commissioner may make an assessment (i.e. raise a tax bill) if, for example:

A person fails to furnish a required return by the due date (sections 28, 29, or 30 of the Act). In practice, not filing a VAT return can trigger an estimated assessment.

The Commissioner is not satisfied with the accuracy of a return that has been submitted (e.g. figures appear incorrect or incomplete).

The Commissioner has reason to believe that a person who should pay VAT has not paid the full amount due (e.g. an unregistered business making taxable supplies, or a registered operator under-reporting sales).

Additionally, if a person not registered for VAT charges “VAT” on a sale, or a registered operator improperly charges VAT on an exempt/zero-rated sale, the law deems that tax payable and the Commissioner can assess it. These situations are less common, but they prevent persons from misrepresenting VAT on invoices.

Statutory Basis: section 31 of the VAT Act gives ZIMRA the legal authority to issue such assessments. section 31(4) allows the Commissioner, in making an assessment, to “estimate the amount upon which the tax is payable.”. In other words, ZIMRA does not need exact figures from the taxpayer if they are unavailable – it can make a reasonable estimate based on available information. This estimate then becomes the assessed tax due.

Procedure and Notice: When ZIMRA issues an estimated assessment, it must give the person written notice of the assessment, stating the amount of tax assessed, any additional penalties (for example, any additional tax for evasion under section 66), and the tax period to which the assessment relates. The notice will typically outline how the estimate was arrived at or the basis (for transparency, although the law only specifically requires the amounts and period). Example: ZIMRA might base an estimate on the taxpayer’s past returns or industry averages. If a trader failed to file a return for Q1, ZIMRA could estimate VAT based on the trader’s prior quarterly sales or any other data (bank deposits, third-party information, etc.).

Implications for the Taxpayer: An estimated assessment is legally enforceable – the assessed tax becomes due and payable. The taxpayer may face late payment penalties and interest on the assessed amount just as if they had self-reported it. ZIMRA often uses estimated assessments to prompt compliance. For instance, ZIMRA issued a public notice in 2023 warning that outstanding returns would result in estimated assessments being raised (ahead of a system migration). In practice, receiving an estimated assessment puts the taxpayer on notice to either pay the amount or correct the record.

Right to Object/Correct: Critically, the taxpayer is not without recourse if an estimate is too high or incorrect. The VAT Act provides that the notice of assessment will inform the person of their right to object within 30 days. The taxpayer can file the missing return or provide the correct figures and lodge an objection to have the assessment adjusted (this is effectively how a revised or reduced assessment can replace the estimate – see section 4 below). If the taxpayer submits the actual VAT return for the period in question (showing the true liability) and it’s lower than the estimate, ZIMRA will generally issue a revised assessment reflecting the correct amount, thereby reducing the previously estimated tax. However, if no objection or correction is made within the 30-day window, the estimated assessment becomes final and due.

Example (Estimated Assessment): Company B fails to file its VAT return for March 2025. In June 2025, ZIMRA issues an estimated assessment for March, perhaps basing it on Company B’s February sales. The assessment might say ZWL 50,000 VAT is due for March. Company B receives a notice of assessment dated 15 June 2025. To avoid overpaying, Company B can still file the March return. If the actual VAT due for March is, say, ZWL 30,000, Company B should submit that return and object to the ZWL 50,000 assessment, providing the correct figures. ZIMRA would then revise (reduce) the assessment to ZWL 30,000 plus any applicable late fees. If Company B ignores the assessment, the ZWL 50,000 (plus penalties/interest) becomes a debt that ZIMRA can enforce.

Solutions walk-through for VAT assessment problems

This walk-through ties the substantive content of section G to worked solutions across the principal VAT-assessment scenarios.

Scenario 1 — Standard self-assessment computation (Company A)

Issue: Computing the net VAT payable on a standard monthly return.

Rule: section 6 VAT — VAT is charged on every taxable supply. Section 28 — VAT7 to be submitted by the 25th day of the following month. Net VAT = output tax − input tax (subject to apportionment). VAT rate 15% (section 9 + Finance Act).

Application: Company A — January taxable sales ZWL 1 000 000; taxable purchases ZWL 600 000. Output tax = 1 000 000 × 15% = ZWL 150 000. Input tax = 600 000 × 15% = ZWL 90 000. Net VAT payable = 150 000 − 90 000 = ZWL 60 000. Filing deadline: 25 February. Payment deadline: same.

Conclusion: Self-assessment is the operator's default obligation. ZIMRA does not pre-audit; it relies on the VAT7 in the first instance, with audit verification on a "trust but verify" basis.

Scenario 2 — Estimated assessment after non-filing

Issue: Taxpayer fails to file VAT7; ZIMRA issues an estimated assessment of ZWL 240 000. The actual liability per the operator's records is ZWL 80 000.

Rule: section 32 VAT:

• Commissioner may issue estimated assessment where operator fails to file. Section 32(5) VAT importing section 62 ITA
• 30-day objection window. Section 69 ITA
• pay-now-argue-later applies.

Application: The operator must:

• file the missing VAT7 immediately with full computation showing ZWL 80 000
• lodge an objection within 30 days of the estimated-assessment notice attaching the now-filed return
• lodge a structured section 69 suspension application for the disputed ZWL 160 000 portion
• pay (or secure with bank guarantee) the undisputed ZWL 80 000 to demonstrate good faith. ZIMRA normally issues a corrective additional assessment under section 31 based on the filed return; the estimated assessment is withdrawn under section 33.

Conclusion: Late-filing penalties under section 41 typically still apply even where the corrective assessment is favourable. The lesson: file on time.

Scenario 3 — Additional assessment after audit

Issue: ZIMRA audits a 2024 VAT period and proposes an additional assessment of USD 45 000 for under-declared output tax (allegedly USD 300 000 of zero-rated exports were standard-rated).

Rule: section 31 VAT — additional assessment power. Section 32(6) VAT — 6-year time bar. Section 63 ITA — burden of proof on the operator. Zero-rating of exports under section 10 VAT requires documentary evidence (Bills of Entry, export documentation, foreign-customer payment evidence, freight forwarder confirmations).

Application: The operator should respond to the draft findings letter with the full export documentary pack, including:

• Bills of Entry stamped by Zimbabwe Revenue Authority
• commercial invoices and shipping documents
• bank inward-remittance evidence in foreign currency
• freight forwarder confirmations of physical export. If the documentary pack is complete, the additional assessment is normally withdrawn at the response stage. If ZIMRA proceeds, the operator lodges objection within 30 days, structured section 69 suspension, and (if disallowed) appeal to the Fiscal Appeal Court.

Conclusion: Zero-rating disputes are won on documentary discipline. Operators selling to overseas customers should embed the export documentary pack in their standard operating procedure for every export shipment.

Scenario 4 — section 48 garnishee on the bank account

Issue: Operator's bank receives a section 48 VAT notice from ZIMRA in respect of an assessed amount of USD 180 000.

Rule: section 48 VAT — Commissioner may appoint banks (and other persons holding money for, or owing money to, the operator) as agents for the purposes of paying VAT. The bank, once served, is statutorily bound to remit unless the notice is withdrawn or stayed.

Application: The operator must:

• urgently engage with ZIMRA's case officer for withdrawal of the notice
• lodge structured section 69 ITA suspension application with prima facie merits, quantified prejudice, and offered security
• consider partial payment to demonstrate good faith
• consider urgent High Court application if the notice is procedurally defective (no prior demand, no consideration of pending objection, manifestly disproportionate)
• accept that the bank cannot lawfully refuse to honour the notice without withdrawal or court order.

Conclusion: Garnishees are aggressive but procedurally constrained. The operator's response speed determines whether downstream cashflow consequences (cheque bounces, supplier disputes) can be averted.

Scenario 5 — Withdrawal under section 33 after corrective filing

Issue: Where ZIMRA has issued an estimated or additional assessment that is later shown to be incorrect, can the assessment be withdrawn?

Rule: section 33 VAT — Commissioner may withdraw or vary an assessment where the original or additional assessment has overstated the liability, or where new information emerges.

Application: The operator files the corrective documentation through TaRMS and lodges a written application for withdrawal of the prior assessment. ZIMRA processes the withdrawal and adjusts the TaRMS taxpayer ledger. Statutory interest accrues only on any portion of the assessment ultimately confirmed; portions withdrawn carry no interest. Penalties for late filing or under-declaration may still apply on the corrective basis.

Scenario 6 — Final and conclusive status under section 34

Issue: When does a VAT assessment become "final and conclusive" and what are the consequences?

Rule: section 34 VAT — assessment becomes final and conclusive on:

• expiry of the 30-day objection window without objection
• withdrawal of objection;
• determination of objection / appeal to the highest competent forum.

Application: Final and conclusive status enables expedited recovery. ZIMRA may invoke section 48 (garnishee) and section 49 (judgment by certificate) without further procedural prerequisites. The operator's defensive options narrow dramatically — the substantive merits cannot be re-litigated in recovery proceedings (subject only to fraud / wilful default unwinding).

Conclusion: The 30-day objection window is the critical gate. Missing it converts a contestable assessment into an enforceable judgment.

Scenario 7 — Refund-position assessment and verification

Issue: An operator files VAT7 with input tax exceeding output tax, generating a refund position. ZIMRA delays processing.

Rule: Sections 44 and 45 VAT — refund framework. ZIMRA may verify the claim before paying out — typical verification queries cover zero-rated export evidence, input-tax invoice authenticity, and reconciliation to the operator's books.

Application: The operator should:

• attach full supporting documentation to the VAT7 submission proactively (rather than waiting for queries)
• follow up monthly with the case officer
• reconcile each month's expected refund against the TaRMS ledger
• consider a written escalation to the Commissioner-General after 90 days of unexplained delay
• be aware that section 71 ITA interest (applied via the wider procedural cross-references) may run on delayed refunds beyond the prescribed period — but practical realisation is variable.

Scenario 8 — Penalty mitigation through voluntary disclosure

Issue: Operator discovers a material under-declaration in a previously-filed return. What is the correct response?

Rule: ZIMRA's Voluntary Disclosure Public Notices provide for materially reduced penalties where the operator discloses voluntarily before being identified by ZIMRA. The standard discount is substantial — often reducing the section 41 penalty from up to 100% to a nominal 10–25%.

Application: The operator files a corrected VAT7 (or a separate adjustment return), attaches a covering letter invoking the Voluntary Disclosure system, and pays the corrected liability plus statutory interest. The voluntary-disclosure status is preserved provided the operator makes the approach before ZIMRA initiates an audit or compliance check. Failure to invoke the system explicitly may result in standard penalties being applied even though the disclosure was technically voluntary.

Cross-cutting practitioner takeaways

:

1. The 30-day clock starts immediately. Late objections almost always fail. Diary the assessment notice date the day it is received.
2. Pay-now-argue-later is the default. Every objection should be paired with a structured section 69 suspension application; never assume the objection alone freezes payment.
3. Burden of proof is on the operator. section 63 ITA. Documentary discipline is the only effective defence.
4. The Fiscal Appeal Court — not the Special Court — is the VAT appellate forum. Practitioners must get the forum right.
5. The 6-year audit window survives closure. Operators must retain records for at least 6 years (longer for fraud cases).
6. Refund cashflow is slower than payment cashflow. Manage client expectations.
7. Voluntary disclosure beats waiting for ZIMRA to find the issue. Penalty mitigation is material.

The most important things to retain from this lesson:

• Statutory grounding: Every position on VAT Assessments in Zimbabwe traces back to a specific section of the relevant tax Act.
• Documentation matters: Maintain contemporaneous records of every transaction, calculation, and election made.
• Watch the pitfalls: Section F highlights the most common errors taxpayers make and how to avoid them.
• Apply the case law: Section E sets out the leading judicial authorities that shape practice in this area.
• Test yourself: Sections G and H provide worked examples and full solutions so you can verify your understanding.