By Alois Vinga
TAX collector, Zimbabwe Revenue Authority (ZIMRA) says it surpassed initially targeted first quarter revenue collections by over $1 million to record a 10.42% surplus.
According to the ZIMRA Revenue Performance for the First Quarter 2020 Report, the taxman sustained a good track record of exceeding earmarked targets.
“During the first quarter of 2020, the Authority collected net revenue of $13.88 billion, surpassing the set target of $12.57 billion by 10.42%.
“Revenue grew by 613.64% in nominal terms, from $1.94 billion realised in the same period in 2019,” the report said.
Accordingly, all revenue heads registered growth in nominal terms with major contributors to revenue being Individuals 17%, Excise Duty 16%, Companies and VAT on Local Sales both contributed 14% while VAT on Imports contributed 11%.
The impressing performance came at a time the nation was battling to contain the Covid-19 outbreak that has seen government struggle to pay health sector workers allowances and to financially support the massive testing rollout programme.
ZIMRA reports that the first quarter of 2020 was characterised by exchange rate-based price adjustments, which resulted in most taxpayers realising higher sales revenue thereby increasing their tax liabilities.
More worrying is that individuals are the major tax contributors ahead of corporates with signs ordinary citizens were being taxed much more than corporates.
“During the period under review, some corporates resorted to aligning salaries with the interbank rate to ensure sustenance of their workforce in light of prevailing hostile economic conditions,” the report said.
The companies’ revenue head registered positive performance, as most businesses realised high inflation driven nominal profits while the shortage of hard cash enhanced the use of electronic and mobile platforms, which provide essential information for audits.
VAT on Local Sales failed to meet the set target after paying $436.81 million worth of refunds.
“Its performance was negatively affected by falling real incomes which saw consumers resorting to very basic foodstuffs which are mainly zero-rated. This reflects in the growing tax expenditure from both zero-rated and exempt goods,” ZIMRA added.