adminBusiness Correspondent
ECONOMISTS have expressed concern over the reduction in revenue collections and are urging Government to tackle the root causes. The net revenue collections by Zimra for the first half of the year fell six percent to $1,66 billion against a target of $1,76 billion. On a comparative basis, the net collections were three percent lower than the $1,72 billion collected during the same period last year.
Zimra board chairperson, Mrs Willia Bonyongwe, attributed the failure by Zimra to meet the revenue target to a myriad of challenges which affected economic performance.
Buy Zimbabwe economist, Mr Kipson Gundani, said the focus should not be on revenue collection, but growing the economy.
He said revenue collection was a function of the performance of the whole economy.
“The low revenue collections by Zimra are a sign that the economy is going the wrong way. However, to cure a disease you need to establish the symptoms,” said Mr Gundani.
He added that the major challenge which was stalling progressive economic growth in the country was lack of foreign and domestic investment due to poor policy implementation.
“Policy alignment and policy congruency is important. We need policy direction at the highest level. Government has to decide whether we become a dumping ground or we develop our own industry . . .
“China took a stance that led to its current economic growth trajectory. It was a closed economy which grew from sound and visionary policies,” said Mr Gundani.
Another economist, Mr Thomas Masese, said more could be attained from mining royalties if small-scale miners were capacitated with machinery to boost productivity.
Mining royalties contributed $39,8 million, which was a 39 percent drop from the target of $64,9 million.
This represented a 65 percent decline in revenue collections compared to $112,6 million that was collected last year.
Although the depressed international mineral prices and lower sales could be attributed, Mr Masese said policy incoherence was the biggest letdown in the mining sector.
“More can be attained from small-scale miners if they are capacitated with follow-up measures put in place to reduce smuggling of minerals outside the country. Policy incoherence in the mining sector especially the diamond sector also reduced investment towards the sector over the years,” said Mr Masese.
Valued added tax on imports, Excise duty and Carbon tax were the only revenue heads that surpassed their set targets during the period under review.
At the Confederation of Zimbabwe Industries congress which ends today competitiveness was topped the agenda.
Debate on industrial production efficiency and development of value chains to maximise productivity has been ongoing since dollarisation in 2009.
Industrialists have been calling for pragmatism and rapport of policies to boost capacity utilisation the manufacturing sector and attract foreign direct investment.
Online Reporter