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In a performance review of the first quarter, the revenue collector’s chairman Mr Sternford Moyo said Value Added Tax contributed most of the revenue with $292.7 million (or eight percent of total), followed by Individual Tax which contributed 19 percent of total revenue with $145,5 million.
Gross VAT collections were 15 percent above a target of $249,5 million.
Mr Moyo attributed the performance of the VAT revenue head to improving local capacity utilisation as 54 percent of total VAT revenue was from local sales.
“The outstanding performance of this revenue head can be attributed to improved local industrial capacity utilisation which enhanced performance of VAT on local sales. In addition, improvement in disposable incomes due to upward review of employees salaries by some companies resulted in increased consumption of goods which attract VAT,” he said.
However, individual tax collections at $145,5 million were 10 percent below the target of $160,2 million.
He said the negative variance was due to the upward review of the tax free threshold from $225 to $250.
“This upward movement in the threshold had the effect of increasing disposable income while reducing the taxable portion,” he said, adding that salary negotiations for most companies had not yet been concluded.
The Customs duty revenue head also missed the target with $88,5 million collected against a target of $90,9 million.
“The quarterly target was missed because the local industry has experienced significant improvements in terms of capacity utilisation. Therefore, the economy is no longer fully dependent on imports, which are the drivers of this revenue head.”
Zimra also realised $88.9 million from excise duty, 21 percent above target, the bulk coming from excise duty on fuel while beer contributed 26 percent.
Company tax performed well, contributing $75,2 million against a target of $69,3 million and
Mr Moyo said this was due to improving capacity utilisation.
Zimra also collected $82.8 million from other taxes which included domestic dividends and interest, tobacco levy and carbon tax.
Online Reporter