TAX MATTERS: Liabilities not removed by VAT deregistration

17

VALUE Added Tax (VAT) is a transaction tax, and the implications will vary for different transactions. Some transactions are taxed at a rate of 14.5 percent (effective January 1, 2020; previously 15 percent) or zero percent, while other transactions are exempt from VAT.
Deregistration relieves the person of the administrative burden of having to account for output tax and entitlements to input tax effective date of deregistration. However, this may prompt a Zimra audit for purposes of ascertaining whether an operator was carrying on his business within the confines of the law.