A tax advisor’s role in a Zimra audit

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Simbarashe Hamudi

AN audit notice from the Zimba­bwe Revenue Authority should prompt preparation, not panic. For a business owner, the immediate pri­ority should be understanding what is be­ing examined, gathering reliable records and responding accurately. A competent tax advisor can help turn that task into a structured process. Their value should lie not in promising to make a liability dis­appear, but in helping the taxpayer estab­lish the facts, apply the law and protect its position throughout the audit.

Zimra’s annual reporting identifies audits and investigations as important elements of its compliance framework. It also recognises objections and appeals as formal mechanisms for resolving dis­putes, emphasising the importance of procedures and timelines. Against that background, professional advice should be viewed as support for lawful com­pliance rather than a means of avoiding scrutiny. The objective is the correct tax outcome, supported by evidence, not confrontation for its own sake.

The starting point should be careful examination of the audit notification. A tax advisor or tax firm should identify the taxes involved, periods under review, in­formation requested and response dates. Management should then agree on re­sponsibilities for retrieving documents and approving explanations. Where a request is unclear or a deadline appears impractical, the tax advisor should seek clarification or an extension prompt­ly, rather than allowing uncertainty to become silence. Every request and re­sponse should be logged.

Technical interpretation is another important contribution. An audit re­sponse should distinguish between what happened commercially, how the trans­action was recorded and how it should be treated for tax. Those questions should be examined separately before reach­ing a conclusion. An advisor should test management’s assumptions against the legislation applicable to the relevant period, rather than simply repeating the accounting treatment or relying on a rule remembered from a different year.

Documents are central to that ex­ercise. Zimra’s VAT guidance requires registered operators to retain account­ing records for at least six years after the relevant tax period. It also identifies obligations concerning returns, correct remittance and tax or fiscal invoices. An advisor should help assemble the relevant fiscal tax invoices, ledgers, contracts and payment evidence into an organised file, with clear referenc­es connecting each explanation to its supporting documents.

Reconciliation should follow. The advisor should compare financial state­ments, tax returns, sales records and bank movements, investigating differences rather than assuming they represent un­declared revenue or harmless bookkeep­ing errors. For example, if management says a bank receipt was a shareholder loan, the response should establish that explanation through reliable documen­tation. The purpose is not to invent a favourable description, but to determine whether the evidence supports the treat­ment already adopted.

Communication should be equally disciplined. Management should consid­er appointing one authorised coordinator to receive requests, allocate work and review submissions with the advisor. Staff should answer truthfully and avoid speculation. Where an answer requires further checking, that should be made clear. Written explanations should distin­guish established facts from estimates or unresolved questions. Copies of submit­ted material and notes of meetings should be retained so that subsequent responses remain consistent and traceable.

A tax advisor should also provide an independent assessment of weaknesses. If records reveal a genuine error, man­agement needs a realistic explanation of the tax exposure and available corrective steps. Defending an unsupported position merely because it appeared in an earlier return should not be the strategy. Equal­ly, an adjustment should not be accepted simply to end an uncomfortable discus­sion. The recommended response should follow the evidence and applicable law, with uncertainty clearly acknowledged.

Reviewing proposed findings de­serves particular attention. The tax ad­visor should check the relevant period, transaction amounts, calculation methods and legal basis for each adjustment. Prin­cipal tax, penalties and interest should be examined separately. A useful working schedule should show Zimra’s position, the taxpayer’s response, supporting doc­uments and the amount disputed. This gives management a clearer basis for deciding which findings to accept, which to challenge and where further investiga­tion is necessary.

Formal deadlines must receive the same attention as technical arguments. Zimbabwe’s courts have discussed the statutory requirement for income-tax as­sessment notices to indicate a 30-day ob­jection period. An advisor should verify the deadline and procedure applicable to the particular assessment immedi­ately. Management should not assume that continuing discussions preserve its position. Any objection should identify the disputed adjustments, explain the grounds and include the supporting evi­dence required for a properly presented challenge.

Cash flow requires separate consid­eration.

The High Court’s decision in Omnia Fertilizer Zimbabwe v Zimra and Others discusses the income-tax principle that an objection or appeal does not auto­matically suspend payment. An advisor should therefore help management con­sider both the merits of a dispute and the immediate collection position. Any available request for suspension or pay­ment accommodation should be assessed under the relevant rules, without assum­ing approval or treating a pending chal­lenge as protection.

Choosing the right representative matters. Zimra’s published guidance explains that external tax agents oper­ate under licensing regulations. Its fre­quently asked questions also make clear that appointing an agent is optional and companies may represent themselves. Businesses choosing external represen­tation should verify the advisor’s current licensing status, relevant experience and proposed scope of work. Engagement terms should explain fees, responsibili­ties and authority to communicate with Zimra, without promising a predeter­mined result.

Professional conduct should remain non-negotiable. Management should reject any proposal to fabricate records, conceal relevant facts or resolve an audit through unofficial influence. An advi­sor should explain limitations honestly and recommend legal assistance where the dispute requires it. Business owners should remain involved, review import­ant submissions and understand deci­sions made in their name. Delegating the work should not mean surrendering over­sight of the company’s records, explana­tions or financial commitments.

Finally, the audit should produce lessons beyond immediate assessment. Management should use the findings to improve reconciliations, document re­tention, approval procedures and staff training. The advisor should leave behind an action plan identifying weakness­es, responsible people and completion dates. The strongest value of profession­al support is therefore broader than any disputed amount: it is a better-informed response during the audit and a more de­fensible compliance position afterwards, built on accurate records and accountable decisions.

● Hamudi is a Managing Partner at Baker Tilly Central Africa, based in Harare, Zimbabwe. He can be con­tacted at +263 775 399 536 or sim­barashe.hamudi@bakertilly.co.zw