ZIMRA fiscalisation penalties

Who must fiscalise

If your business trades in Zimbabwe and your points of sale are not sending data to ZIMRA's Fiscalisation Data Management System, the meter is already running. The published civil penalty accrues per point of sale, for each day you remain in default.

ZIMRA's Fiscalisation Explained page states that all VAT-registered operators should fiscalise as outlined in SI 104 of 2010 and must comply with the requirements of FDMS. The same page puts the obligation wider than VAT: all taxpayers are required to fiscalise in terms of Section 90 of the Income Tax Act [CAP 23:06] as read with Section 80D and Section 80DD of that Act, and the obligation also applies to taxpayers whose annual turnover falls below the VAT registration threshold of USD 25,000.00.

Businesses that bought devices and went live often treat the matter as closed. Then a till stops transmitting, a network link drops, a new branch opens with unregistered tills, or an upgrade breaks the connection. Sales keep ringing up normally on the shop floor, so nobody notices. Somebody in the business has to check transmission status every day.

The published penalty

ZIMRA's note on offences and penalties in fiscalisation sets out the consequence of failing to fiscalise in terms of section 3: a civil penalty of US$25.00 per point of sale, for each day the taxpayer remains in default, "not exceeding a period of one hundred and eighty-one days". If the person continues to be in default after 181 days, that page states they shall be guilty of an offence and liable on conviction to a fine not exceeding level seven, or to imprisonment for a period not exceeding 12 months, or to both.

The 181-day ceiling is the point at which the exposure changes character, from a daily civil penalty into a criminal offence. The value of a level seven fine is not stated on that page.

The same note covers further offences, including manufacturing, selling or distributing unapproved fiscal devices, and failure to comply with the Second Schedule. It cites SI 104 of 2010 as read with SI 148 of 2016 and SI 153 of 2016.

Why the arithmetic gets large quickly

US$25.00 is a small daily figure, and it is multiplied twice over: once by the number of points of sale you operate, and again by every day the default continues.

Worked through the published rate:

• Three tills, thirty days in default: US$2,250.
• Eight tills, ninety days in default: US$18,000.
• Twelve tills, the full 181 days: US$54,300.

Those figures are arithmetic on the published rate. They are here because finance managers routinely underestimate the exposure by a factor of the number of tills they run.

What counts as a fiscal device

ZIMRA describes fiscal devices as electronic devices used in recording transactional data before it is sent to the ZIMRA servers, and states that they may be hardware based, meaning physical devices, or software based, meaning virtual devices. What makes a hardware unit fiscal is its fiscal memory, which ZIMRA defines as a special read-only memory permanently built into a fiscalised device to store tax information at the time of the sale.

The broad categories ZIMRA lists as available in the market are fiscalised electronic registers, also referred to as cash registers or electronic tax registers (ETRs); fiscalised printers; electronic signature devices (ESDs); and virtual fiscal devices (VFDs). VAT-registered operators and taxpayers not registered for VAT are allowed to choose whichever devices they prefer, based on the nature of their business and their capacity to implement the option chosen. Hardware devices should be acquired from the approved suppliers, who ZIMRA says will assist in identifying appropriate devices, install them, and provide training on appropriate usage. All of that appears on ZIMRA's fiscalisation overview.

Virtual fiscalisation through your own system

Virtual fiscalisation is the use of software-based virtual fiscal devices, an application programming interface, or POS applications compatible with FDMS for recording, transmitting or interfacing with ZIMRA servers. ZIMRA lists two options: a direct interface from the taxpayer's server to the ZIMRA server, and a direct interface from the taxpayer's accounting or POS system to the ZIMRA server.

Any registered operator is eligible, depending on taxpayer needs and the ability to develop APIs for interfacing with the ZIMRA FDMS. ZIMRA describes the route as suitable for medium to large taxpayers and clients, particularly those processing transactions on connected servers, accounting systems or point of sale systems, and states that small traders can also use virtual fiscalisation through a mobile point of sale. The API for this option can be accessed by taxpayers free of charge from the ZIMRA website, where the fiscalisation API documentation is published for download.

What ZIMRA publishes on acquisition costs

Incentives attach to acquiring fiscal devices. ZIMRA states that registered operators can claim 50% of the cost of acquisition of the fiscal electronic registers as input tax on their VAT 7 return, and that the remaining 50% is spread over two years and claimed as SIA on the income tax return (ITF 12C). The same ZIMRA page lists a rebate of duty for approved suppliers, no VAT on importation by approved suppliers, and zero-rating on local supply.

Those reliefs sit against the cost of getting compliant. Measured against US$25.00 per point of sale per day, delay is the expensive option.

Where ZIMRA publishes the rules

The primary material sits on ZIMRA's own site, and a finance team can read all of it in an afternoon:

• Fiscalisation explained, ZIMRA's overview of the regime, its devices and its incentives.
• Offences and penalties in fiscalisation, the source of the civil penalty and the criminal exposure described above.
• Compliance with the ZIMRA Fiscalisation Data Management System, ZIMRA's compliance notice on FDMS.
• Public notices, ZIMRA's index of notices to taxpayers.
• Fiscalisation API documentation, the specification your software supplier builds to.

What to do if you are non-compliant right now

1. Establish the facts before you talk to anyone. How many points of sale do you operate, how many are registered with ZIMRA, and when did each one last successfully transmit? Write it down with dates.
2. Stop the accrual first. Every day of investigation is a day of exposure at the published rate. If a technical fix restores transmission, do it before you finish the paperwork.
3. Put disclosure in the hands of your own tax adviser. Whether, when and how to approach ZIMRA is a judgement call with real consequences for your business.
4. Keep the evidence of the cause. Network outages, device failures and supplier delays are documented events, and records made at the time are worth more than a reconstruction later.
5. Fix the monitoring. If nobody is watching transmission status daily, you will be back here.

Where Africube fits

We supply and implement FDMS fiscalisation built to the ZIMRA FDMS specification. It connects your sales system to FDMS, transmits what ZIMRA requires, and shows you transmission status, so a failed connection surfaces the same day.

Our access to your accounting data is read-only: we read it and never write to it, so your books stay untouched. We work with Sage Evolution, Sage Pastel and QuickBooks, and we can talk through what a connection would involve for the system you already run. We are a software implementer, and we do not represent you to ZIMRA.

Everything above is general information about published requirements, written for a business owner trying to size a problem. Requirements, penalty amounts and statutory instruments change, so anything binding on your business must be confirmed with ZIMRA directly or with a qualified tax adviser acting for you.

If the technical side is what is blocking you, tell us what you run and we will tell you what connecting it involves.