THE Zimbabwe Revenue Authority (Zimra) says the 2020 revenue performance will relatively decline to the initial projections in view of the anticipated economic slowdown and turbulences in the operating environment exacerbated by the negative impact of the COVID-19 pandemic.
BY MTHANDAZO NYONI
Zimbabwe has, due to the dreaded pandemic, induced an indefinite lockdown to combat the spread of the deadly virus.
However, the move, according to Zimra spokesperson Francis Chimanda, has impacted negatively on revenue collection.
“Indeed, revenue collection has greatly been affected due to the lockdown-related factors that include shutdown of borders, travel restrictions that have disproportionately reduced imports, thereby affecting revenue collection from excise duty and customs duty, reduced receipts from tourism,” Chimanda told NewsDay Business.
The revenue collections were also affected by supply shocks that were induced by the lockdown and social distancing regulations, disruptions of Zimra’s normal operations for example, physical enforcement mechanisms such as site visits that improve compliance as well as extension of deadlines for taxpayers to cushion them from effects of COVID-19.
“So far, among other factors, the above have contributed to performance below quarterly target for value-added tax (VAT) on local sales, capital gains tax (CGT) and CGT withholding, tobacco levy, excise duties and mining royalties for the first quarter of 2020,” he said.
Chimanda said a 6,86% below target revenue collection for the month of April 2020 in net terms after adjusting for refunds was recorded.
“In view of the anticipated economic slowdown and turbulences in the operating environment exacerbated by the negative impact of COVID-19 pandemic, 2020 revenue performance will decline relative to the initial projections,” he said.
“Generally, the net revenue collected is directly correlated to economic activity as measure by the gross domestic product (GDP), i.e, a decline in GDP automatically translates to a decline in net revenue collected.”
Chimanda said the Finance and Economic Development ministry was working on a revised framework and actual details of revised revenue estimates would be announced during the mid-term budget review.
During the first quarter of 2020, Zimra managed to collect cumulative net revenue of $13,88 billion against a target of $12,57 billion, 10,42% above budget.
Last year, the taxman collected net revenue of $23,19 billion against a target of $18,60 billion, a 24,65% above target.