ZIMBABWE’S dependency on imported products has declined, stimulating demand on the domestic market as industrial capacity utilisation in the manufacturing sector gradually improves, official figures have shown.
In its latest report for the period under review, Zimbabwe Revenue Authority (Zimra) chairman Sternford Moyo said revenues for the third quarter rose to $823,4 million, marginally surpassing projected targets, buoyed by a mixture of direct and indirect taxes.
The growth in government inflows were spurred by value added tax (VAT), individual tax and company tax.
“The economy is no longer fully reliant on imports, implying that the propensity for consumers to import dutiable products has also declined,” Moyo said. Official figures show that capacity utilisation, which reached an all time low before at the height of the country’s economic meltdown in 2008, is averaging 57,2%.”
“Net collections amounted to $823,4 million against a target of $822,6 million, resulting in a positive variance of 0,1%.”
“A large portion of revenue was realised from value added tax, individual tax and company tax. These revenue heads contributed $271,1 million, $163,03 million and $117,2 million respectively,” said Moyo.
Net VAT collections, according to the statement, surpassed a target of $268 million as the economy continued to be driven by consumption. Total company collections were 2% above target, driven by improved capacity utilisation in some key manufacturing sub-sectors.
This, Moyo said, resulted in a decline in import levels and customs duty.
Excise duty contributed $101 million, missing a target of $103 million. Out of this, duty on fuel contributed 72,1%, while excise duty on beer contributed 20,4%.
“The growth in demand for fuel due to improved industrial capacity utilisation and the recent increase in rates of excise duty for both petrol and diesel have improved revenue inflows under this revenue head,” added the Zimra chairman.
Moyo added that low liquidity levels negatively affected the performance of the Zimbabwe Stock Exchange resulting in low capital gains withholding tax collections.
Low activity in the mortgage sector, he said, also affected the performance of capital gains tax.
The improved revenues come at a time when the government has taken its begging bowl to regional economic powerhouses seeking Budgetary support.
The mining sector, which accounts for more than 50% of total exports, contributed $37,2 million of the revenue through mining royalties, surpassing a target of $31,4 million.