Zimra misses H1 revenue target ZIMRA offices

ZIMRA OFFICES
Walter Muchinguri Assistant Business Editor—

Zimra’S net revenue collections for the first half of the year fell 6 percent to $1,66 billion against a target of $1,76 billion. On a comparative basis the net collections were 3 percent lower than the $1,72 billion collected during the same period last year. Zimra board chairperson Mrs Willia Bonyongwe attributed the failure by Zimra to meet the revenue target to a myriad of challenges which affected economic performance.

These, she said, included liquidity constraints, limited lines of credit from financial institutions, power shortages, retrenchments and company closures.

“The shrinking of the formal economy has led to the growth of the informal sector whose contribution to revenue is not significant.

“Such challenges have seen some clients failing to honour their tax obligations, resulting in the authority failing to meet the set target for the first half of the year,” she said.

The bulk of the collections came from individual tax which contributed $379,5 million, representing 23 percent of total revenue, followed by excise duty which contributed $346,2 million, representing 21 percent.

VAT on imports and VAT on local sales contributed $215,2 million and $212,7 million respectively, accounting for 13 percent apiece.

Despite contributing the most revenue individual tax collections were 3 percent below the target of $390 million.

During the same period last year, $429,5 million was collected under individual tax, which translates to a decline of 12 percent in revenue, a factor that was attributed to retrenchments and company closures.

Revenues from excise duty were, however, up 21 percent against a target of $285 million with duty on fuel contributing 77 percent of total revenue.

Excise duty on beer and airtime contributed 10 and 6 percent respectively. The remainder of the revenue was realised from duty on tobacco, wines and spirits, second-hand motor vehicles and electric lamps.

During the same period last year, a total of $241,4 million was realised from the revenue head, which translates to a 43 percent increase in this year’s revenue collections, largely due to an upward review of excise duty rates for petrol and diesel which resulted in higher excise duty revenue collections as compared to last year and excise duty on airtime.

Net VAT on local sales was 33 percent lower against a target of $316,3 million due to low disposable income in the hands of the consumers and a higher VAT refund bill of $153,8 million in the period under review compared to $116,3 million refunded last year.

Corporate income tax collections at $167,5 million were 9 percent short of the target of $185 million and 15 percent lower than the $196,5 million collected during the same period last year.

Mrs Bonyongwe attributed the performance to the depressed economic environment which has negatively affected the profitability of companies.

“These include liquidity challenges, limited credit facilities and high operational costs, among others,” she said.

Customs duty collections totalled $160,4 million which was 12 percent shy of the $183 million target while on a comparative basis collections of the revenue head was 17 percent lower than the $137 million collected during the same period last year.

Liquidity challenges which negatively affected the importation of duty-paying goods and customs duty suppressing instruments, which enabled the importation of goods under rebates, trade agreements and concessions, were blamed for the drop in collections for the revenue head. A total of $436,9 million was foregone during the first half of the year.

Carbon Tax collections increased by 15 percent to $17,4 million against a target of $15,1 million but increased by 1 percent from the $17,2 million collected during the same period last year due to an increase in import volumes of petrol compared to last year.

Mining royalties contributed $39,8 million, which was a 39 percent drop from the target of $64,9 million.

This represented a 65 percent decline in revenue collections compared to $112,6 million that was collected last year.

The performance of the revenue head was attributed to depressed international mineral prices and lower sales.

Revenue collections from other taxes amounted to $46,1 million against a target of $65 million, resulting in a negative variance of 29 percent.

This reflected a 34 percent decline from the $69,4 million that was realised during the same period last year.

You Might Also Like

Comments

Take our Survey

We value your opinion! Take a moment to complete our survey