HomeNewsZimra revenues off the mark

Zimra revenues off the mark

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Collections by the government’s revenue arm, the Zimbabwe Revenue Authority (Zimra), missed the target in the first six months ending June, weighed down by performances of customs duty, individual tax and value added tax (VAT).

Revenue collections in the period under review amounted to $1 495 billion against a target of $1,5 billion.

Finance minister Tendai Biti has since proposed far-reaching reforms that could grant Zimra powers to access and examine any mining operations, as Treasury seeks to plug revenue leakages.

According to a new Finance Bill published a fortnight ago, Zimra would be empowered to examine security systems at mining locations, check and make copies of or take extracts from books, accounts, vouchers, documents, maps, drilling logs or records of any kind.

In a trading update Zimra chairman Sternford Moyo said inadequate and antiquated infrastructure continued to negatively affect economic revival especially with regards to border post efficiency.
He said the improvement of efficiency at border posts was one of Zimra’s priorities.

Despite VAT missing its target by 3%, it remains the major source of revenue with collection totalling $497,2m against a target of $510,2m.

Individual tax was 6% off the mark of the projected $320 257 million at $178 047m attributed to the upward review in the tax-free threshold.

“The second quarter brought in more revenue compared to the first quarter of 2012. A total of $774,6m was collected within the second quarter while collection for the first quarter amounted to $720,4m,” said Moyo.

Customs duty was 10% off the mark with collections totalling $170,3m against a target of $189,9m, though this was significantly higher than collections at the same time last year.

Due to improved capacity utilisation in local companies, the Zimra boss said this had reduced the country’s reliance on imports.

“The performance of this revenue head was negatively affected by lack of lines of credit in the economy, which is making it difficult for industry to import both raw materials and equipment,” he said.
Excise duty collections exceeded the target by 11% with collection of $157,4m with duty from fuel contributing 62% followed by beer at 27%.

“Increase in disposable income as a result of the upward review of the tax-free threshold led to an improvement in the consumption of excisable commodities. The country has registered a growth in demand for fuel as industrial capacity utilisation is gradually picking up,” said Moyo.

Moyo attributed high excess duty to improved audits and follow-ups by Zimra that were completed by public campaigns and stimulated improvements in tax compliance.

In order to raise additional revenue to finance inescapable expenditures, excise duty on diesel and petrol will go up from 16 and 20 cents per litre to 20 and 25 cents per litre respectively, with effect from August 1.

This measure is expected to raise additional revenue of about $20m.

Company tax was 13% ahead of target at $178m due to improved industrial capacity utilisation and quarterly payments.

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