THE Zimbabwe Revenue Authority managed to exceed its revenue target of $3,2 billion last year despite slowing economy-driven contributions of Value Added Tax (VAT) and individual tax, the authority has disclosed.
Business Reporter
Revenue collection for the year ended December 2012 eclipsed the target after totaling $3,4 billion.
VAT and Individual tax contributed 33% and 21% respectively.
Collections from VAT amounted to $1,083 billion slightly below the target of $1,85 billion.
In an update on the revenue collection for 2012, Zimra chairman Sternford Moyo said the economy had grown as previously projected.
“To some extent, fiscalisation levelled the playing field for large operators, thereby improving compliance,” he said.
“The capacity of industry has not been growing at the anticipated rate, thereby negatively affecting the performance of the revenue head.”
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Economic growth targets for 2012 were revised downwards from an initial projection of 9,4% to 5,4% and then 4,4% as liquidity constraints continued to haunt the economy.
The rise in individual tax collections which eclipsed the target of $645 million by 6% was attributed to the recapitalisation and improved profitability of some companies in addition to enhanced enforcement measures.
Customs duty, excise duty and company tax weighed in with $354,2 million, $394 million and $442 million respectively.
Under excise duty, fuel was the major contributor at 69% with beer adding 22%. The remainder of the revenues was contributed by tobacco, wines, spirits and second-hand motor vehicles.
“Excise duty on diesel and petrol was increased from $0,16 and $0,20 to $0,20 and $0,25 respectively during the course of the year resulting in increased revenue collections from fuel.
“Consumption of excisable commodities increased during the festive season resulting in more revenue emanating from this tax head,” Moyo said.
Finance minister Tendai Biti last year hiked the excise duty on diesel and petrol in a bid to raise additional revenue to finance inescapable expenditures.
The measure was expected to raise additional revenue of about $20 million.
