The Sunday Mail
Livingstone Marufu
The Zimbabwe Revenue Authority (Zimra) has surpassed its third quarter revenue target of US$863,50 million to achieve US$1,03 billion due to higher collections in Value Added Tax, data from the agency shows. During the corresponding period last year, Zimra collected US$893 million.
In a statement released on Wednesday, Zimra chairperson Mrs Willia Bonyongwe said the revenue collection enhancement measures such as systems automation, audits and anti-corruption initiatives were bearing fruit.
“Gross collections for the quarter were US$1,03 billion; translating to 19,25 percent above the target of US$863,56 million. Net collections after deducting US$62,05 million in refunds amounted to US$967,76 million, which is still 12,07 percent above target.
“The gross collections were 13,30 percent above the same period in 2016. The positive performance is attributable to higher collections in Value Added Tax (VAT) on local sales and imports, individual tax, excise duty and company tax,” said Mrs Bonyongwe.
The major revenue heads performed well, surpassing set targets during the third quarter of 2017. The most outstanding performers being company tax 30 percent, VAT on imports 23,77 percent, net customs duty 16,26 percent and withholding tax on contracts 64,67 percent.
Of great concern is the performance of mining royalties, which was 24,35 percent below the set target despite improvements in mining revenues during the first nine months to September 2017.
This subdued performance can be attributed to fluctuating mineral prices on the international market and foreign currency constraints. Revenue performance in the first nine months of 2017 was higher than the same period in 2016, except for April and June.
Revenue performance in the first nine months of 2017 was higher than the same period in 2016, except for April and June.
The smoothened line indicates that collections in 2017 have been maintaining a positive trajectory owing to the consistency in the implementation of revenue enhancement measures.
For the period under review, this tax head contributed US$194,15 million and the collections were 1,54 percent above the target of US$191,21 million.
Compared to the same period in 2016 where US$204,03 million was collected, revenue collections decreased by 4,84 percent.
The revenue head continues to be adversely affected by retrenchments, salary cuts and inconsistent salary payments by companies in the private sector and others in the public sector that rely on Government subvention.
Mrs Bonyongwe said Government is heavily indebted to companies in both the private sector and public enterprises and its affecting this tax head.
Total collections of US$112,03 million from company tax were 30,27 percent above the set target of US$86 million.
During the same period last year, collections were US$102,03 million; indicating a 9,81 percent increase in revenue collections this year. The positive performance of the tax head was mainly due to improved compliance by fuel im- porters.
Diesel importations increased by 20,83 percent from 194 million litres during the third quarter of 2016 to 234,41 million litres in the third quarter of 2017.
This is a proxy of the success of the cargo tracking system. The Electronic Cargo Tracking System has been crucial in combating transit fuel fraud and has increased the submission of consumption declarations for fuel imports.
However, petrol imports declined by 54,19 percent from 106,62 million litres in the third quarter of 2016 to 48,85 million litres this year.
This decline is due to the mandatory blending requirements, which now make use of a significant high local content in the form of ethanol produced in Zimbabwe. It could also be indicating the level of petrol smuggling under the cover of jet fuel but ZIMRA is closely monitoring these imports.
“The law should not allow smugglers to continue operating and should put more stringent penalties on commercial smugglers to deter others. Just paying duty and penalty is not enough.”
The ZIMRA board believes that current collections are still a tip of the iceberg and is determined to stir up management to re-double the current measures to ensure increased compliance.
Lifestyle audits will also continue, covering ZIMRA officials and high-profile individuals to ensure that people account for their income and pay their fair share of taxes as a contribution to the national economy.
