Zimra Q1 revenue spikes $2billion..2c tax, excise duty major contributors

22 Apr, 2019 - 00:04 0 Views
Zimra Q1 revenue spikes $2billion..2c tax, excise duty major contributors ZIMRA Offices

The Chronicle

Business Reporter

THE Zimbabwe Revenue Authority (Zimra) recorded $2 billion revenue collections in the first quarter ended March 31, 2019, a 41,5 percent jump above $1,45 billion target for the period.

Excise duty, the Intermediate Money Transfer Tax (IMTT) and corporate income tax were among the top performing revenue heads, Zimra board chair Mr Callisto Jokonya said in a revenue update issued yesterday.

“Revenue performance for the first quarter of 2019 surpassed the set target in both gross and net terms. 

“Gross collections amounted to $2,059 billion, which was 41,50 percent against set target of $1,455 billion,” he said.

“After deducting refunds of $114,98 million, net collections were $1,944 billion. This translates to a positive variance of 33,63 percent above the target of $1,455 billion. Compared to same period in 2018, gross collections grew by 85,13 percent from $1,112 billion.”

Excise duty collections alone amounted to $565 million against a target of $242 million, which translates to a positive variance of 133,5 percent. Compared to the same period last year excise duty collections grew by 142 percent from $233 million. 

The revenue head contributed 27,4 percent to total net collections during the first quarter with performance largely attributed to increased duty rate and demand and supply of diesel and petrol whose consumption has been on the increase.

According to the report, IMTT, popularly known as 2c tax after it was reviewed late last year, recorded $282 million collection against target of $150 million, which translates to a positive variance of 88,5 percent. 

The revenue head grew by 5 333 percent when compared to $5,21 million collected in the first quarter of 2018 before policy change. The revenue head contributed 14 percent of total net revenue collections during the quarter.

Corporate income tax recorded $242 million, 40,7 percent above target of $172 million, attributable to improved profitability by some established firms, improved compliance and enforcement. 

Collections grew by 88,3 percent from $128 million that was collected during the same period last year. 

Similarly, VAT on local sales grossed $336 million up from $265 collected in the first quarter of 2018, which translates to a positive variance of 9,2 percent above set target of $308 million and a growth factor of 26,7 percent. 

VAT on imports recorded $127 million collections surpassing target of $117 million by 8,3 percent with a positive growth of 3,3 percent from $123 million recorded same period last year. 

Individual tax collections, however, stood at $235,9 million against target of $235,2 million with a marginal positive variance of 0,30 percent and 21 percent growth from $193 million in the same period last year. 

Mr Jokonya attributed the trend to subdued labour market and inflationary pressures that have hit workers’ pockets. 

Meanwhile, customs duty net collections were 12 percent below target at $91,2 million. Despite growth in import volumes, Mr Jokonya said collections were negatively affected by the charging of duty in forex, which saw a drop in vehicle imports. 

The Zimra board chair said overall positive performance was buttressed by the authority’s revenue enhancement measures and strategies aimed at promoting voluntary compliance. 

He noted that first quarter of 2019 has been characterised by many economic challenges that created a difficult operating environment for businesses and consequently revenue collection. 

Mr Jokonya paid tribute to businesses for continuing to support the economy and meeting their tax obligations.

Share This: