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Mrs Willia Bonyongwe

Business Reporter
SUBDUED international commodity prices continue to induce a strain on mining royalties with the Zimbabwe Revenue Authority (Zimra) missing target collection from the revenue head of $28,93 million in the third quarter of 2016 by 48, 86 percent.

In a revenue performance report for the third quarter ended September 30, 2016, Zimra board chairperson Mrs Willia Bonyongwe said mining royalties’ revenue collections for the period closed at $14,79 million.

“Mining royalties revenue collections closed (Q3:2016) at $14,79 million way below the set target of $28,93 million resulting in a 48,86 percent negative variance.

“Performance of the revenue head was adversely affected by the slump in commodity prices and despite the increase in export volumes for gold and platinum exports, the performance was still subdued,” she said.

“The value of diamonds exported have also been declining and volumes are much lower than at the same period last year.”

She said mining royalties’ revenue declined by 14,37 percent when compared with collections realised during the corresponding period last year where a decline of 24,57 percent was recorded.

To date collections for the year amount to $47,77 million, said Mrs Bonyongwe.

Turning to other revenue heads during the period under review, Mrs Bonyongwe said individual tax contributed $204 million, which was 0,91 percent slightly above the targeted $202 million.

The performance was largely increased by the set off payments, which were done during the quarter, but generally the revenue head was not performing due to job losses and failure to pay salaries by taxpayers.

She added: “A total of $102 million was realised in (Q3: 2016), which was 5,18 percent above the target of $97 million. Actual collections grew 19,84 percent when compared to (Q3:2015), and they also increased by 10,80 percent in comparison with (Q2 2016) revenue collections. The debt component declined by 4,81 percent from $750,16 million to $415 million during the period under review.”

Mrs Bonyongwe revealed that Value Added Tax on local sales realised 15,58 percent from the $136,24 million collected in (Q3: 2015).

Gross collections were $222,44 million, which translated to 24,19 percent of total gross revenue for (Q3: 2016).

“However, this worked $157,46 million net after $64,98 million in refunds. The net revenue posted a growth of 2,60 percent when compared to (Q2: 2016).”

Revenue realised on VAT on imports totalled $89,79 million, which exceeded the set target of $86,90 million by 3,33 percent.

From January to September, a total of $261,48 million has been collected. Revenue declined by 22,60 percent when compared to (Q3: 2015), but was an increase of 4,02 percent when compared to (Q2: 2016). Revenue foregone during the quarter amounted to $27,94 million.

“The positive performance of the revenue head was enhanced by imports of raw materials used by the local industry as well as other companies which are recapitalising,” she said.

Mrs Bonyongwe said Statutory Instrument 64 of 2016 has stimulated local manufacturing production, which improved capacity utilisation by the companies whose products are protected by the SI.

“This had a positive outcome on their profitability, and a marked improvement in their contribution to the fiscus during the quarter. SI 64, should other things remaining equal also, have a multiplier effect on the economy in the medium term with rising employment levels and increasing aggregate demand,” she said.