The Zimbabwe Revenue Authority (Zimra) missed the target revenue collection by 6% after collecting US $1,66 billion for the first half of the year due to the shrinking formal economy.
BY TARISAI MANDIZHA
The target was $1,76 billion. Net collections declined by 3% from the same period last year when $1,72 billion was collected.
In a statement accompanying the revenue performance report for the first half of 2015, Zimra chairperson Willia Bonyongwe said the first half of the year was characterised by challenges such as liquidity constraints, limited lines of credit from financial institutions, power shortages, retrenchments and company closures which affected economic performance.
“The shrinking of the formal economy has led to the growth of the informal sector whose contribution to revenue is not significant. Such challenges have seen some clients failing to honour their tax obligations, resulting in the authority failing to meet the set target for the first half of the year,” Bonyongwe said.
In the period under review, value-added tax (VAT) on imports, excise duty and carbon tax were the only revenue heads that surpassed their set targets.
Individual tax made up the bulk of the revenue collected in the first half of 2015, contributing 23%, followed by excise duty (21%). Both VAT on imports and VAT on local sales contributed 13% each.
Individual tax revenue collections amounted to $379,5 million against a target of $390 million, resulting in a negative variance of 3%.
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During the same period last year, $429,5 million was collected, which translates to a decline of 12% in revenue due to retrenchments and company closures that negatively impacted on the performance of the revenue head.
Corporate income tax declined by 15% to $167,5 million against a target of $185 million from the same period last year.
VAT on local sales gross collections was $366,5 million against a target of $316,3 million, while net VAT collections amounted to $212,8 million against a target of $316,3 million, resulting in a negative variance of 33%.
Net VAT on local sales contributed 13% to total revenue and 49,7% to total VAT revenue.
During the period under review, VAT on imports collections amounted to $215,2 million against a target of $195,7 million.
Customs duty collections amounted to $160,4 million against a target of $183 million. As for excise duty, a total of $346,2 million was collected against a target of $285 million,Bonyongwe said an upward review of excise duty rates for petrol and diesel has resulted in higher excise duty revenue collections as compared to last year and also revenue collections were also boosted by excise on airtime.
During the first half of the year, carbon tax recorded $14 million against a target of $15,1 million, resulting in a positive variance of 15% while mining royalties declined 65% to $39,8 million as compared to $112,6 million collected last year due to depressed international mineral prices and lower sales.
Mining royalties’ contribution declined by 39% to $39,8 million against a target of $64,9 million, while other taxes recorded $46,1 million against a target of $65,0 million, resulting in a negative variance of 29%.
