Oliver Kazunga, Senior Business Reporter
THE Zimbabwe Revenue Authority (Zimra) says it is investigating an upsurge in tax refunds paid out in the second half of 2016 that saw net revenue collections declining by seven percent to $3,248 billion compared to the previous year.
In a statement showing revenue performance for the year ended December 31, 2016, Zimra chairperson Mrs Willia Bonyongwe said:
“Net collections amounted to $3,2 billion but were 91 percent of the target. They were affected by an upsurge in refunds in Q3 and Q4 and the authority is investigating what caused that surge. Net collections went down by 7,22 percent in relation to the same period in 2015.”
She said the annual gross collections for last year were $3,4 billion reflecting a four percent decline against a target of $3,6 billion.
Mrs Bonyongwe also said gross collections for the fourth quarter amounted to $893,89 million against a target of $935,17 million.
“Net collections after deducting refunds of $50 million from the gross collections were $843,74 million.
“However, there was a 12 percent decline in net collections in Q4 of 2016 compared to the same period in 2015 and the most affected tax heads being customs duty, mining royalties and PAYE,” she said.
Gross VAT on local sales collections for the year amounted to $812,82 million against a target of $610,10 million.
VAT refunds for the year amounted to $211,60 million, resulting in net collections of $601,22 million.
Company Tax contributed $340,72 million to total collections during the period under review and this was 18 percent down from the 2015 collections of $424,68 million and seven percent below the projected $366.40 million.
Individual tax amounted to $736,53 million making up 23 percent of total revenue.
“The year 2016 started with a debt of $1,97 billion, which accumulated to $2,67 billion at the close of 2016. The figure does not include $1,11 billion, which is the amount that was recovered in 2016 from outstanding debt. The growth in debt reflects the new debt arising from assessments done due to automation either from previous under-declarations and evasion as well as inability to pay by taxpayers,” said Mrs Bonyongwe.
The debt on Pay as You Earn stood at $662,16 million as at the end of the year, compared to $591,89 million the previous year and in 2015 as a number of firms reviewed their remuneration packages downwards to manage costs and remain operational.
Revenue collections under VAT on Imports went down by 18.7 percent from the $440.65 million realised in 2015 to $358.25 million in 2016.
Excise Duty on fuel contributed 80 percent to this tax head.
Beer and airtime contributed eight percent and six percent respectively. The rest of the revenue was from excise duty on tobacco, wines and spirits, electric lamps and second-hand motor vehicles.
Revenue from excise duty amounted to $640,30 million against a target of $751,70 million.
Mining Royalties contributed $62,90 million, which translates to 57,17 percent of the targeted $110,03 million and $56,37 million was realised from other taxes against a target of $57,94 million. 2016 collections increased by 9,90 percent from the 2015 collections of $51,29 million.