THE ZRA JUNE 30 DEADLINE FOR WITHHOLDING TAX ON RENTAL REGISTRATION IS MERELY ADMINISTRATIVE NOT PUNITIVE MEASURE
We wish to assure members of the public countrywide, in particular, landlords and tenants in low density areas that they should not panic on the 30th June 2018 deadline by the Commissioner General Mr. Kingsley Chanda for registration for withholding tax on rental income. It has come to our attention that the exercise is merely an administrative undertaking which is meant to allow ZRA to prepare and register tenants and landlords. This assurance has been given to us by the Finance Minister Margret Mwanakatwe in her letter to us dated 16th May, 2018.
According to the Minister, taxable rental income has not yet been agreed upon by Ministry of Finance and concerned stakeholders. In this regard, it is our understanding that ZRA will not pounce on any tenant or landlord who defaults on the deadline.
Furthermore, in view of this disclosure by the Minister, we urge ZRA to make registration of tenants and landlords as an on-going exercise. The exercise should not make be time-bound because being a tenant or landlord is a dynamic event. A landlord today may be a tenant the following day and vice versa. For this reason, time-bound registration for tenants is rendered an exercise in futility.
In addition, in view of the Minister’s clarification, we do not expect ZRA to embark on an exercise to start collecting this tax from tenants and landlords, particularly those who pay or receive rent that is less than K3, 000.00 per month. Collection of rent from the said persons should only be triggered upon mutual agreement, by the Ministry and concerned stakeholders, of taxable threshold. As the Minister has stated, Section 45 applies to persons who receive taxable income. In this particular case, taxable income for rent is not yet agreed upon and set by the Minister. Technically therefore, tenants and landlords are not yet obliged to report the said income to the ZRA Commissioner General.We sincerely thank the Minister for this clarification. Meantime, we urge tenants and landlords to continue with the registration while the issues surrounding this tax are amicably resolved by the Ministry and stakeholders.
Find attached the letter from the Minister for your kind reference.