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Business Reporter
The Zimbabwe Revenue Authority missed its net revenue target for the half-year to 31 June and blamed liquidity challenges, power cuts and scaling down of operations by companies for the below par performance. Zimra collected $1,66 billion in net revenues against a target of $1,67 billion, resulting in a one percent negative variance.
Zimra chairman Mr Sternford Moyo said a shrinking revenue base caused by company closures, retrenchments and scaling down of operations had affected Zimra’s revenue collections.
He said the second quarter collections missed the target after first quarter collections surpassed the target by six percent.
Mr Moyo said net collection in the second quarter were $836,9 million against a target of $886,2 million.
The bulk of the authority’s revenue came from Value Added Tax which contributed $517,2 million (or 31 percent of total collections).
However, collections under the VAT revenue head were three percent below the $535,7 million target.
Local sales contributed the largest chunk of VAT at 54 percent, with the remainder coming from imported products.
“The revenue head’s performance was subdued due to low capacity utilisation and the general liquidity constrains in the economy,” said Mr Moyo.
Salary adjustment, back pay and school fees allowances given to workers were a boon to the Individual Tax revenue head, also know as Pay as You Earn, as collections rose 13 percent from the first half of the year to $347,3 million against a target of $308,3 million.
The effects of the poorly performing economy were apparent on the Company Tax revenue head which failed to meet its target by 10 percent.
Just more than $185 million was collected from Company Tax from a target of $205,8 million.
“The revenue head’s performance was negatively affected by unavailability of long-term as well as working capital to finance operations and replacement of obsolete plant and equipment,” said Mr Moyo.
The authority did not meet the target to collect $180,3 million from Customs Duty after realising $172,7 million. Mr Moyo attributed this to the liquidity challenges in the economy which affected imports.
Excise Duty raised $235,5 million against a target of $226,8 million. Duty on fuel provided the bulk of the revenue with 69 percent, followed by beer (21 percent) with the balance coming from tobacco, wines and spirits and second hand cars.
Falling international commodity prices saw mining royalties raining $81,1 million from a target of $107,8 million.
“The depressed performance of the revenue head was mainly due to the softening of international mineral prices, mainly gold and diamonds,” he said.
Online Reporter