Zimra misses target as economy slows

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THE Zimbabwe Revenue Authority was nine percent shy of its revenue target in the quarter to September.
According to the third quarter performance report from Zimra, net revenue collections amounted to US$884.5 million against a target of US$972,3 million resulting in a negative variance of nine percent.
The figures show the effects of the liquidity crisis, fall in industrial capacity utilisation and lack of lines of credit which have resulted in a reduction in the volumes of duty paying imports.
Most of the revenue was realised from Value Added Tax (VAT) which contributed $250.2 mln, followed by Individual Tax and Excise Duty which contributed US$226.2 million and US$122.9 million respectively.
A total US$12 million was collected from dividends and interest against a target of US$9 million. The main contributions to this revenue head were withholding taxes on non- resident tax on fees and non- resident tax on dividends.
VAT contributed the greatest portion of the revenue, bringing in 28 percent of total collections while Individual Tax and Excise Duty contributed 26 percent and 14 percent respectively.
VAT collections contributed 28 percent to total revenue. Gross collections were $325.7 mln against a target of $321.4 mln. VAT refunds amounted to US$75,9 million thus culminating in net collections of US$250,2 million, which translates to a negative variance of 22 percent against the quarterly target.
Individual tax revenue increased seven to US$226,2 million from the comparable year ago period and 19 percent ahead of the target of US$190 million.
Corporate income tax was down 10 percent to US$92,2 million and 11 percent below the target.
Zimra said this can be attributed to liquidity challenges that negatively affected the ability of companies to finance and recapitalise their operations.
“The depressed performance of Corporate Income Tax is also due to the harsh economic environment which negatively affected the profitability of local companies.”
Gross collections from Customs Duty were US$88.7 million while net collections for the quarter were US$88.2 million against a target of US$117.1 million. Net collections were, therefore, 25 percent below target.
Limited mortgage finance by the majority of financial institutions saw Capital Gains Tax collections amount to US$5,5 million against a target of US$8,8 million.Advertisement

“Should liquidity challenges persist, this would negatively impact on the performance of the revenue head,” said the tax collector.