Zimra exceeds revenue target

Finance Minister Tendai Biti had crafted a US$2,4 billion budget for 2011 on projected collections of about US$2,5 billion but the variance gives him little room to manoeuvre.
He expressed fears the budget deficit would top US$700 million by December 2011.
Zimra board chairman Mr Sternford Moyo said the outstanding revenue inflows were due to improved capacity utilisation, a stable economy and the authority’s effective revenue collection.
“Revenue inflows improved significantly towards the end of the year and the authority managed to surpass the annual target from the Ministry of Finance by 11 percent,” said Mr Moyo.
VAT contributed the most at US$1,1 billion after a 10 percent positive variance and the revenue collector attributed the strong showing to improved compliance, audits and follow-ups. Zimra said improved information dissemination, audits and follow-ups resulted in improved compliance and improved production enhanced sales, hence better performance from the VAT head.
Import VAT also performed well due to the fact that depressed capacity utilisation in local industry meant it could not meet demand and imports were necessary to supplement local output.
Individual tax weighed in with US$588 million after exceeding targeted collections by 22 percent as a result of firms that raised salaries and gave workers bonuses and performance awards. There were increased employment numbers as firms, some of which had closed down, resumed operations while others reopened due to the gradual improvement in the economic conditions.
Company duty exceeded the US$270 million collection target by 10 percent. This performance has been attributed to improved production capacity, which enhanced profitability.
However, the shortage of lines of credit militated against industrial expansion as did erratic utility service supply (water and electricity) as well as high tariffs, which hindered firms’ productivity.
A total of US$334 million was collected from customs duty against a target of US$325 million to give a 3 percent positive variance aided by fears around plans to ban imports of used cars.
At US$306 million, excise duty contributed 11 percent to total collections resulting in a 30 percent positive variance to the targeted US$236 with fuel accounting for 62 percent of inflows.
The authority pointed out that the capacity utilisation of firms that contribute to excise duty improved to 93 percent from 85 percent in 2010, which helped increase inflows from this revenue head.
Mr Moyo said mining royalties contributed the most under the Other Taxes category while presumptive tax was second. Follow-up and audits on Presumptive Tax enhanced inflows from this head.