HARARE: Zimbabwe’s tax agency missed its revenue collections in the quarter that ended in September by nine percent after it collected $878, 2 million revenues.
The southern African country finances its entire budget through mainly taxes and the failure to meet revenue targets would have far reaching negative impact on government meagre coffers. Zimra is therefore, going to leave no stone unturned in pursuing tax evaders who did not take advantage of this opportunity
According to a trading update, the bulk of the Zimbabwe Revenue Authority (Zimra) revenue was realised from individual tax, excise duty and Value Added Tax (VAT) on local sales, which contributed 22 %, 20 % and 16 % respectively.
Mining royalties at $17 million were 55 % below target. Year on year, the sector’s contribution fell 47 % from $33, 12 million in 2014. Corporate tax contributed $85, 14 million of total revenue against a target of $124 million.
“The performance of the revenue head (corporate tax) was dampened by reduced margins as the local companies felt the heat from competing imports. Company closures also continued to depress the revenue head,” said board chair Willia Bonyongwe in a statement.
Revenue from excise duty surpassed the targeted $151 million after Zimra collected $176 million while customs duty collections also increased by 1.22 % to $89, 32 % compared to $88 million realised in the same period last year, although falling below the targeted $100 million.
Zimra collected $202 million through VAT against a target of $161 million with net revenue collection also increasing by 10 % to $123 million. VAT collected from imports was $116 million, surpassing the targeted $104 million.
Zimra expressed concern over low uptake of the tax amnesty that was meant to give clients whose tax affairs were not in order, a chance to regularise them. The amnesty ended in September with a few clients heeding the call.
“Zimra is therefore, going to leave no stone unturned in pursuing tax evaders who did not take advantage of this opportunity,” Bonyongwe warned. The drop in revenue collections comes amid reports that at least 7 500 tax evaders prejudiced Treasury of millions of dollars in unremitted dues since Zimbabwe introduced the multi-currency system in 2009.
Zimra is now targeting corporate account holders at banking institutions in a move which analysts believe is calculated to make it easier for the tax collector to sweep funds from defaulting corporates. Zimbabwe’s economy has been on the decline since 2013 when a unity government formed by President Robert Mugabe and the opposition ended.
