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THE Zimbabwe Revenue Authority has missed its revenue collection target for the third quarter to September 30 2013 after collecting US$897 million against the budgeted US$904 million.
While the 1 percent variance appears marginal, it certainly raises concerns that if inflows do not improve in the last quarter the taxman might fall short of Treasury’s US$3,6 billion annual target.
But Zimra chairman Mr Sternford Moyo said he was optimistic that if the spirit of responsible citizenship continued, aided by an improved economic outlook, the target for 2013 would be exceeded.
“The marginal variance was due to harsh economic conditions prevailing in the country and the sluggish economic performance during the run-up to the harmonised elections,” Mr Moyo said.
Mining royalties, while they were expected to contribute the least compared to other major revenue heads, had the biggest target variance at 39 percent after inflows amounted to US$39 million.
Mr Moyo said mining royalties suffered from fluctuations in international mineral prices, while royalties from diamonds were negatively impacted by illegal Western sanctions on diamond mining firms.
In the quarter under review, company tax contributed US$102,4 million against a target of US$105,2 million due to depressed industrial performance as capacity utilisation declined this year.
This negatively impacted on the performance of most companies, and the performance of the revenue head as firms could not access lines of credit to recapitalise and replace obsolete equipment.
Value added tax underperformed after collections totalled US$284 million against a target of US$291 million with most firms still importing goods that attract VAT to supplement local production.
Individual tax collections amounted to US$211,3 million against a forecast for US$171,2 million largely due to salary increments and performance awards granted to employees.
Audits and follow-up initiatives also resulted in improved compliance by taxpayers thereby helping the individual tax head to perform beyond the projected collections for the quarter under review.
Collections from customs duty came in at US$91,8 million compared to the budgeted US$94,1 million weighed down by capital equipment and raw materials that attract low or no duty. Excise duty contributed US$129,9 million against a target of US$125,5 million with the positive variance attributed to hiking of the duty on fuel, whose price was raised by US5c last year.
Other taxes comprising tax on domestic dividends, capital gains tax, withholding tax, carbon tax, tobacco levy and others accounted for US$38,9 million against projected inflows of US$54,1 million.
Mr Moyo called on all taxpaying individuals, organisations and companies to meet their tax obligations for the country to meet its critical needs at a time the economy faces many challenges. Zimbabwe is still trying to shake off the effects off a decade-long recession brought about by Western sanctions that decimated the country’s gross domestic product by half.
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