Many practice owners notice it the same way: the claims were paid, but the money in the bank is far less than expected. Look closely at the remittance advice and there it is, a line deducting 30% as withholding tax.
What the rule says
Under Zimbabwe's Income Tax Act, anyone paying for goods or services must withhold 30% of payments to a supplier who has not given them a valid tax clearance certificate (ITF263), once payments to that supplier reach US$1,000 in a year. Medical aids pay practices for services, so they apply the rule. The rate rose from 10% to 30% on 1 January 2022, which is why the problem suddenly became painful.
Is the money gone?
Not necessarily. ZIMRA holds the withheld amount and credits it against your income tax when your return is assessed, and any excess can be refunded or set off. But in the meantime your cash is tied up, and recovering it depends on having the withholding certificates from each payer and records that match them.
How to make sure nothing is withheld
- Stay compliant. Returns filed, QPDs and PAYE paid, VAT if registered. A clearance is only issued when your tax affairs are in order.
- Diary the expiry date. Start the renewal well before the current certificate lapses.
- Send it to every payer. Each medical aid and corporate client needs a copy on file. Ask them to confirm.
- Check every remittance. Catch any deduction in the week it happens, not at year-end.
If tax was withheld in error
Sometimes tax is withheld even though a valid clearance existed, often because the payer never updated its records. Send the payer your ITF263, ask for the error to be corrected, and make sure every amount withheld is supported by a certificate and claimed as a credit.
General information based on ZIMRA guidance as at October 2026. Rules can change; get advice for your own situation.