Oliver Kazunga, Senior Business Reporter
THE Zimbabwe Revenue Authority (Zimra) targets to collect $6 billion revenue having surpassed revenue target for the first half by 2.72 percent to $1.7 billion. The figure is 9.74 percent higher than the relative period last year.
In a revenue performance report for the first half ended June 30, 2017, Zimra board chairperson, Mrs Willia Bonyongwe, said gross collections were 8.05 percent above target to $1.789 billion.
The tax agency said Zimbabwe’s revenue collection has the potential to reach $6 billion.
“The Gross Domestic Product growth rate was revised to 3.7 percent and hence the projected revenue target is now $3.4 billion for 2017.
“With this level of economic performance and all state-of-the-art cars being driven around Zimbabwe, all construction going on, etc, the revenue collected could easily increase to $6 billion if everyone complies,” she said.
During the period under review, the tax collector targeted to collect $1.656 billion. On performance of specific revenue heads, Mrs Bonyongwe said revenue under the individual tax was expected to improve through contributions from Small to Medium Enterprises. This follows the formalisation of 13 000 SMEs as of June 30.
“Collections under this revenue head amounted to $347.41 million, which was 92.57 percent of the targeted $375.29 million, translating to a decline of 2.35 percent from $355.77 million collected in 2016.
“Salary cuts, retrenchments and irregular salary payments by some companies continue to affect the performance of this revenue head,” she said.
Revenue from company tax, she said, contributed $214.27 million against a target of $157 million giving a positive variance of 36.48 percent.
“Revenue collection during the period increased by 47.90 percent from $144.87 million collected in 2016.
“The above improved performance can be attributed to profitability in the financial sector and some sectors of the economy as well as the use of electronic payments, which makes it difficult for companies to cheat,” said Mrs Bonyongwe.
“Transfer pricing as well as Zimra compliance efforts, which include appointment of agency, follow ups, risk based audits and debt set offs have also contributed to the performance,” she added.
Excise duty accounted for 17.8 percent of gross collections while net VAT on local sales and VAT on imports contributed 18 percent and 10.5 percent respectively.
The growth in excise duty was due to improved import volumes of diesel to 394.56 million litres from 374.18 million litres in the comparable period last year.
Mining royalties generated $34.27 million against a target of $27.9 million. The improvement was attributed to the firming up of metal prices on the global market and increase in production of platinum and gold in the period under analysis.
Petrol imports, however, declined by 4.62 percent to 208.74 million litres due to smuggling and under-declaring of volumes imported.
Customs duty declined by 3.04 percent from $135.41 million in the first half last year to $139.53 million.
Mrs Bonyongwe said tax debt rose 16.85 percent to $3.12 billion from an opening debt of $2.67 billion in January 2017.
During the period under review, VAT on imports rose by 10.94 percent to $188.6 million from $170 million raised in the same period in 2016.
She said VAT on local sales improved by 13.74 percent to $323.85 million, buoyed by the introduction of 10 percent VAT withholding tax effective April 1. — @okazunga.