Zimra surpasses revenue collection target

“Cumulative gross collections for the year amounted to $2,8 billion against a target of $2,5 billion. Net collections were $2,6 billion against a target of $2,5 billion resulting in a four percent positive variance. VAT refunds processed during the year amounted to $177 million,” said Mr Moyo.
He said Value Added Tax (VAT) and individual tax contributed most of the revenue with 40 percent and 22 percent respectively.
“Collections amounted to $1,1 billion against a target of $990 million, resulting in a 10 percent positive variance.”
Mr Moyo said the performance of that revenue head could be attributed to improved information dissemination, audits and follow-ups done by the authority that improved compliance levels.
Collections under individual tax exceeded the $480 million target by 22 percent to $588 million.
Mr Moyo said the positive performance of the revenue head could be attributed to companies that increased salaries and awarded bonuses and performance awards to employees during the course of the year.
He said the tax base during the course of the year was also widened following the resumption of operations by some of the companies that had closed down.
Customs duty was third with 12 percent followed by company tax and excise duty which both contributed 11 percent.
Collections under company tax of $296 million surpassed the Ministry of Finance’s target of $270 million by 10 percent.
Some companies managed to increase productivity during the year and their profitability also improved.
“However, shortage of lines of credit militated against industry’s expansion plans. In addition, erratic utility supplies and exor-bitant tariffs hindered optimum productivity for most companies,” he said.
Under customs duty, $334 million was collected against a target of $325 million.
“The anticipated ban on importation of second-hand motor vehicles older than five years accelerated collections under import VAT,” he said
Collections under the excise duty amounted to $306,6 million, exceeding Government’s target of $236,5 million.
Mr Moyo said mining royalties contributed the most revenue under other taxes while presumptive tax came second.
“The authority carried out a number of audits and follow-ups on presumptive tax clients during the year and these resulted in improved compliance,” he said.
Meanwhile, Zimra has announced that it has introduced surtax of 25 percent on a number of products entering the country with effect from 1 January.
The products include second-hand light passenger vehicles that are more than five years old from date of original manufacture, fresh or chilled potatoes, homogenised preparations of meat, and organic surface active products and preparations for washing.
The Zimbabwe National Chamber of Commerce immediate past president Mr Trust Chikohora said the move was meant to protect local industries from foreign imports.
He said the objective of increasing surtax was also meant to energise the economy.
“In some cases, the move is meant to protect local industries that are facing stiff competition from imported products. For instance, the local textile and clothing sector has suffered stiff competition from imported products.
“By increasing surtax on items such as luxury vehicles, the objective is to redirect uses of forex from luxuries to others that are more productive to the economy and thus energise the economy for growth,” he said.