FLNANCE (No. 2) 2014 FINANCE (No. 2) BILL, 2014 MEMORANDUM This Bill will amend the Finance Act [Chapter 23:04], the Income Tax Act [Chapter 23:06], the Value Added Tax Act [Chapter 23:09] and the Customs and Excise Act [Chapter 23:02]. In more detail, the individual clauses of the Bill provide as follows: Clause 1 This clause sets out the Bill's short title. Clauses 2 and 6 These clauses give effect to the abolition of the presumptive tax on small-scale miners. Clause 3 Section 80 of the Income Tax Act provides that if persons who enter into contracts with the Government or statutory bodies have not submitted income tax returns for the most recent year of assessment, the Government or the statutory body concerned will be obliged to withhold 15% of all payments due to them under the contracts and pay the withheld amounts to the Commissioner. These amounts will then be set off against the income tax due by the contractors when their tax liability is finally assessed. The amendment made by this clause ensures that the minimum amount due for a contract to be subjected to this section is an aggregate of $250 over the year of assessment; this defeats avoidance of this provision by breaking up the amount due into a series of single transactions amounting to less than $250. Clause 4 The Finance Act, 2014, inserted a new section 80A into the Income Tax that sought to simplify the mechanism for taxation of performing artists and plug existing tax loopholes, It introduced a 15% withholding tax on gross fees paid to non-resident performing artists, with effect froml January 2014. However, no penalties were provided for non-compliance with this new provision by the contractors of non-resident performing artists, or their withholding agents. This clause enacts penalties for failure to withhold or make over the required withholding tax. Clause 6 This clause amends the "Thirteenth Schedule on the payment of employees tax (PAYE). It addresses an exceptional situation in the parastatal sector where, among other abuses, some senior management paid their tax liabilities using the moneys of the parastatals they were responsible for, without making good from their own resources the moneys thus paid over. Clause 7 This clause corrects an error in the definition section of the Value Added Tax, which defines the tenn "fiscalised electronic register" in two ditlerent ways. Clause 10 The Finance Act, 2014, amended the Value Added Tax Act by imposing an export tax of US$0.75 per kg on raw hides exported from Zimbabwe. The effect of (i)