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Prosper Ndlovu Business Editor
The government coffers remain suppressed with revenue collections for the third quarter to September 2015 dropping nine percent below the targeted $964 million to $878,2 million. The Zimbabwe Revenue Authority (Zimra) attributes the negative revenue performance to the difficult economic environment characterised by low liquidity, power supply deficit and strengthening of the US dollar against major regional currencies, which continue to take toll on local businesses.
In its revenue performance for the period, Zimra said a combination of these factors continue to put pressure on local products, which are struggling to compete with cheaper imports from the region, some of which have preferential or low tariffs due to regional agreements.
“A lot of companies closed down or are in further distress as a result of the situation,” said Zimra. “This had an adverse impact on margins and employment levels.” During the period individual tax, commonly known as pay as you earn, contributed $195.4 million, which accounts for 96 percent of the targeted $203 million.
The revenue head recorded a 13 percent decline from $226 million that was collected in the same period in 2014.
The trend has been attributed to retrenchments that swept across the country following the landmark July Supreme Court ruling that gave employers leeway to fire workers on three months’ notice while some reduced remuneration packages. Collections from mining royalties also dropped 47.8 percent to $17.27 million against the targeted $38 million.
The figure compares negatively with $33 million that was realised during the same period last year. Zimra said the depressed global commodity prices worsened the burden on mining sector. Corporate income tax contributed $85 million compared to $92 million collected in the same period last year.
“All this impacted negatively on various revenue heads. Consequently the authority has again failed to meet its revenue target for the quarter,” said Zimra. While collections for the period generally remained lower compared to last year, value added tax (VAT) customs duty and excise duty, recorded higher collections.
Revenue from excise duty surpassed the targeted $151 million to settle at $176 million while customs duty also increased by 1.22 percent to $89,32 percent compared to $88 million realised in the same period last year, although falling below the targeted $100 million.
Value added tax on local sales clocked a positive variance of 25.9 percent to $202 million against a target of $161 million with net revenue collection also increasing by 10 percent to $123 million. Value added tax on imports were $116 million surpassing the targeted $104 million.
The tax agency expressed concern over low uptake of the tax amnesty that was meant to give clients whose tax affairs were not in order, a chance to regularise them. The amnesty ended in September with a few clients heeding the call.
“Zimra is therefore, going to leave no stone unturned in pursuing tax evaders who did not take advantage of this opportunity,” the agency warned.
Online Reporter