Marvelous Tapera 
ZIMBABWEAN tax laws bring into gross income all amounts an employee derives in connection with employment, including all amounts received or accruing to a person by reason of employment or cessation of such employment. 
It does not matter whether such amounts are paid in terms of a signed contract or under an implied contract or whether income is paid by a past, present or prospective employer.
In a nutshell, an employee is taxable in respect of any amount received “in respect of services” that he rendered in the past, or services which he may render in the future or in respect of his agreeing to any variation in his terms of employment or upon giving up his job or for forfeiting a right to be appointed to a particular position.
The income includes any payment in respect of services or in appreciation of services rendered if there is a casual link between the services and payment. The words “in respect of” indicate that there must be a direct or causal relationship between the amount received and the services rendered (R. v. COT 16 S.A.T.C. 151).
In Stander v CIR 1997 (3) SA 617 (C) (59 SATC 212, the taxpayer was a bookkeeper for one of Delta’s franchisees in Cape Town.
At a convention held by Delta in 1988, he was nominated by Delta as one of the top bookkeepers of the franchise dealers in South Africa, entitling him and his wife to an overseas trip, which cost Delta R14 000. In the 1990 tax year, the Commissioner sought to tax the value of the trip in the hands of the taxpayer.
The taxpayer’s objection having been disallowed, on appeal to the Cape Provision Division, the court observed that the relevant section of the South African Act (similar in wording to ours) required a causal connection between the amount received or accrued and the services rendered by the taxpayer.
The court held that the services rendered to Delta’s franchise was not the cause of the award, but that the taxpayer had merely performed his normal duties for which he was remunerated by his employer.
The court thus, found as to the casual requirement of the Act, namely that an amount had to be received or accrue “in respect of services rendered”, that the fact that the taxpayer’s employment with Frank Vos Motors was a sine qua none of the receipt by him of the award was insufficient.
In supporting this position, Friedman JP said: “In regard to the question whether the trip could be said to have been given ‘in respect of services rendered’ the court a quo found out that the award clearly ‘stands in a direct causal relationship to the services rendered by him ‘They are designed, according to the Honours Brochure issued by Delta, to motivate the people involved in Delta’s field distribution of retail vehicles. Bramwell, who is the vehicle sales manager employed by Delta and who testified at the hearing before the Special Court, stated that awards recognise excellence in the various fields of Delta’s activities…In Stander’s case the award was made in recognition of the meticulous manner in which he recorded data and prepared the reports for his employer, which were submitted to Delta on a regular basis.
“The manner in which the franchise holders’ employees performed their work was obviously of benefit to Delta. Stander was an employee of Frank Vos Motors and was a sine qua non to his receiving award. If he was an employee of a Delta franchise holder, he would not have been eligible to receive the award.
“The fact does not, however, provide the necessary causal link between the services which he rendered to his employer and his obtaining the award. Those services did not constitute the causa causans (immediate cause) of the award. He did not seek the prize by entering a completion (cf ITC 976 24 SATC 812).
“Nor did he expect to receive anything from Delta for the work he performed for Frank Vos Motors. He merely performed his normal duties for which he was remunerated by his employer. The fact that these duties were performed in a manner which Delta considered to be excellent was what qualified him to receive the prize.”
Accordingly, for an amount to be considered as having been received in respect of serviced rendered, there must be a real link between the services performed and the income received.
The duration of a contract of employment is immaterial as far as liability to tax is concerned. As such part-time workers, casual workers or temporary workers are required to pay tax as long as their earnings meet the minimum tax threshold, applicable tax tables should be applied when computing the tax (daily, weekly, monthly or annual tax tables).
In conclusion, amounts brought into gross income through the income tax laws include salary or wages, allowance, bonus, Christmas hampers, overtime pay, premiums, gratuity, fees, commission, prizes, awards, compensation etc., given or granted to the employee in respect of any employment, whether in money, goods, land, meals, sustenance, the use of premises or quarters or otherwise.
If any employee receives any of these for services rendered, the amount should be included in the employee gross income and be subjected to employment tax.
Meanwhile, Matrix Tax School invites you to the upcoming annual tax conference, which runs from May 25, 2021 to May 28, 2021 at Elephant Hills Hotels in Victoria Falls.
Tapera is the founder of Tax Matrix (Pvt) Ltd and the chief executive of Matrix Tax School. He writes in his personal capacity.
