Individual, company tax top Q3 revenue contributions

Business Editor

INDIVIDUAL tax payers and companies contributed the bulk of revenue to the fiscus in the third quarter ended 30 September in which the Zimbabwe Revenue Authority (Zimra) surpassed the new quarterly revised target of $500,25 billion.

Zimra attributed the positive performance to enhanced revenue strategies it continues to implement but acknowledged the inflation creep, which has necessitated a supplementary budget due to the weakening of the local dollar.

Treasury had to revise the annual tax revenue target upwards in line with the prevailing operating environment from $809,4 billion to $1,6 trillion.

Zimra Commissioner General, Ms Regina Chinamasa said despite the macro-economic pressures, which have been compounded by the crippling impact of the Russia-Ukraine war on key trade supplies, all revenue heads recorded positive gains.

“All revenue heads registered growth in both nominal and real terms except for net VAT on local sales, which declined by 4,21 percent and 2,18 percent in nominal and real terms respectively on account of a huge refund bill amounting to $44,67 billion,” said Ms Chinamasa in a statement accompanying the revenue report for the period.

“Major contributors to net revenue collections for the third quarter were Individuals (18,65 percent), Companies (15,6 percent), Excise Duty (13,16 percent), VAT on Imports (11,57 percent) and VAT on Local Sales (10,68 percent).”

Ms Chinamasa said salary adjustments in recent months and part payment of salaries in foreign currency were likely causes of the positive performance of the Individuals Tax head, which contributed the most.
Similarly, companies recorded a positive performance during the quarter, surpassing the set target by 33,77 percent while VAT on local sales performed below expectations, missing the target by 4,21 percent in net terms while gross collections were 58,29 percent above the target.

Ms Chinamasa said VAT on imports tax head performed positively, surpassing the target by 31,66 percent as Customs and Excise Duties also surpassed their targets by 14,14 percent and 28,83 percent, respectively.

The Intermediated Money Transfer Tax (IMTT), also known as the two cents tax, performed above the set target as it increased by 13,68 percent.

“The authority surpassed the new quarterly revised target of $500,25 billion by 37,16 percent in gross terms and 28,17 percent in net terms as a result of revenue enhancement strategies it continued implementing,” said Ms Chinamasa.

She said Domestic Revenue Mobilisation was critical in oiling national development programmes, especially in the context of sanctions that continue to frustrate access to international lines of credit and constrain development funding support.

In order to enhance ease of doing business for convenient taxation, she said Zimra has rolled out self-service kiosks in Harare to enhance efficiency in tax remittance particularly targeting Small and Medium Enterprises (SMEs).

The self-service caters for clients who have challenges accessing the internet and the project is expected to expand to other parts of the country and reduce SMEs’ compliance costs.

“Some of the completed works under the ongoing border modernisation and upgrade project at Beitbridge Border Post were commissioned during the quarter to improve efficiency in trade facilitation,” she said.