Senior Business Reporter
THE Zimbabwe Revenue Authority (Zimra) missed its revenue target for the third quarter again with a nine percent margin to $884,5 million against the $972,3 million target as poor economic conditions continue to exert pressure on revenue inflows. In the previous quarter, Zimra missed its target by one percent to 1,72 billion against a $1,74 billion target.
Zimra commissioner-general Gershem Pasi said in a 2014 third quarter report yesterday most of the revenue collected was realised from Value Added Tax (VAT), which contributed $250,2 million, followed by individual tax and excise duty that contributed $226,2 million and $122,9 million respectively.
Zimra had targeted $190 million individual tax while excise duty projection was pegged at $136,5 million.
“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,” he said.
“Most of the revenue was realised from VAT, individual tax and excise duty, which contributed 26 percent, 25 percent and 14 percent respectively.”
He said VAT gross collections were $325,7 million against a target of $321,4 million.
“VAT refunds amounted to $75,9 million thus culminating in net collections of $250,2 million, which translates to a negative variance of 22 percent against the quarterly target,” he said.
Pasi said gross collections for VAT on local sales during the quarter were $199,3 million while net collections amounted to $123,9 million against a target of $189,3 million resulting in a 35 percent negative variance.
“Net VAT on local sales contributed 49,5 percent to total VAT revenue and 14 percent to total revenue. This represents an eight percent decline in net collections from the same period last year where a total of $185,3 million was collected. The performance of the revenue head can be attributed to the fall in industrial capacity utilisation which has resulted in reduced productions of goods and services that attract VAT,” he said.
Corporate income tax contributed $92,2 million to total revenue against a target of $104 million resulting in a negative variance of 11 percent.
Revenue collections from companies decreased by 10 percent from the 2013 third quarter collections of $102,4 million.
“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,” said Pasi.
During the same period last year, $5,3 million was collected and the amount realised in the third quarter reflects a 59 percent increase in revenue collections.
The main contributions to the revenue head were withholding taxes on non-resident tax on fees and no-resident tax on dividends.
Zimra also collected revenue under the Collections from Capital Gains Tax (CGT) and CGT Withholding Tax amounting to $5,5 million against a target of $8,8 million while the tobacco levy realised $624 million against a target of $1,9 million resulting in a 67 percent negative variance.
During the quarter under review, revenue collection from carbon tax amounted to $8,9 million against a target of $11,2 million resulting in a negative variance of 21 percent.
Mining royalties, meanwhile, contributed $33,1 million to total revenue against a target of $48,3 million resulting in a negative variance of 31 percent.
Pasi attributed the trend to the general fall in gold output and prices on the international market.
He said collections from other taxes were $29,4 million against a target of $23,3 million resulting in a 26 percent positive variance.