Zimra to enforce more revenue collection strategies

Business Reporter —
THE Zimbabwe Revenue Authority has added nearly 4 000 tax players to the revenue collection system and will enforce more revenue collection strategies from January next year. Faced by declining revenue collection owing to a shrinking tax base, Zimra will also intensify anti-corruption campaigns and tax educationto simplify processes.

The new tax players were added to the tax net through the automation of the revenue collector’s systems. Zimra chairperson Mrs Willia Bonyongwe said the automation system has helped increase efficiency which has minimised corruption.

“One of the methods (to deal with tax threats) is to increase compliance and we do that by increasing efficiency, enforcements and this is done through automation. You get orders to supply to (for example) Zesa or big mines but the taxman does not know you.

“When we automate or connect with those companies your name will be flashed out. We have been able to net in about 4 000 tax players, who are real big players, who were outside our tax base,” said Mrs Bonyongwe.

Automation enhances, convenience, efficiency and accuracy. Without automation, under-declarations can be as high as 60 percent of what is brought before the taxman, according the Zimra chairperson. Tax avoidance and evasion have contributed to the contraction in revenue collections in the country as companies and individuals dodge the taxman.

Mrs Bonyongwe said there was a threat to the sustainability of the country’s tax system emanating from the challenging economic environment. Company closures, reduced capacity utilisation, liquidity constraints and deflationary pressures resulted in companies failing to meet their tax obligations. Yet tax revenue is one of the major sources of income for the country.

Mrs Bonyongwe said corruption and informality of the economy have also added to threats to tax base sustainability. Corruption, she said, was a cause for concern as it was threatening the entire economy. This is despite the fact there is still some economic activity particularly with the boom in the informal sector.

“There is recognition the tax base has shrunk, but it is still there because we see people driving expensive vehicles and developing mansions that are not on mortgages.

“There is a shift in the economy, which makes it difficult to see what is happening and what to collect. People are running businesses in their homes and making money,” she said.

To tackle threats to revenue collections, Zimra said it was intensifying anti-corruption campaigns, tax education to simplify processes as well as enforce fiscalisation beginning January next year.

In the six months to June 2016, Zimra missed revenue collection target by 6 percent, while collections for the period were 9 percent lower than same period last year. The revenue authority achieved $1,65 billion against a target of $1,75 billion on economic challenges. However, revenue collections for the quarter to September were $919 million, ahead of the target of $917 million

You Might Also Like

Comments

Take our Survey

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