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Business Reporter
The Zimbabwe Revenue Authority marginally missed its target for the third quarter, citing a sluggish economic performance in the run up to the harmonised elections. The revenue collectors collected $897 million against a target of $904,9 million. While most revenue heads slightly missed their targets, the largest negative variance in percentages terms was in mining royalties due to falling global metal prices. Zimra had budgeted to collect $63 million from mining royalties but only managed to get $39 million, a negative variance of 39 percent.
However, Zimra chairman Mr Sternford Moyo, expressed confidence that the lifting of sanctions on the Zimbabwe Mining Development Corporation by the European Union would see a rise in royalties. Following its removal from the EU sanctions list, the ZMDC is now able to sell diamonds from its Marange mines in the bloc.
“Mining royalties were negatively affected by fluctuations in international prices of minerals. In addition, royalties from diamonds were negatively affected by the placing of some diamond mining companies under sanctions. Therefore, the recent decision by the European Union to lift sanctions that had been imposed on ZMDC will go a long way in aiding the performance of this revenue head,” he said in a statement.
Most of the authority’s revenue collections came from Value added Tax, with 32 percent of the collections.
Collections under the individual tax surpassed the target by 23 percent, raising $211,3 million despite company closures and the scaling down of operations by some businesses.
Mr Moyo attributed the performance to salary adjustments and performance awards given by companies.
“Furthermore, audit and follow-up initiatives by the authority resulted in improved compliance from clients, thereby boosting revenue collections,” he said.
Decline in manufacturing took its toll on company tax as the $105,2 million target was missed, with Zimra collecting $102,4 million.
Mr Moyo said the decline in capacity utilisation from 44,6 percent in 2012 to 39,6 percent this year affected company tax collections.
“Many companies suffered from lack of credit lines to recapitalise and replace obsolete equipment,” he said.
Also affected by the fall in capacity utilisation was the Value Added Tax on local sales revenue head which collected $154,8 million against a target of $168,5 million.
However, in an indication that the country was importing most of its goods, VAT on imported goods surpassed the target by five percent with $129,3 million collected.
Excise duty also surpassed the target with almost $130 million being collected against a target of $125,5 million
Mr Moyo said as the country prepares for the festive season, they expected more inflows from excise duty as there would be an increase in consumption of commodities such as alcohol and fuel, which attract excise duty.
Zimra raised $38 million from other taxes against a target of $54,1 million resulting in a variance of 28 percent.
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