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Oliver Kazunga, Senior Business Reporter
THE Zimbabwe Revenue Authority (Zimra)’s 2021 first quarter to March 31, revenue collection totalled $90,62 billion, which is a 4,73 percent ahead of the targeted $86,52 billion.

Net collections stood at $88,26 billion after refunds of $2,35 billion were deducted, giving a positive variance of 2,01 percent.

In a first quarter revenue performance update, Zimra said in comparison with the same period in 2020 where a total of $13,88 billion was collected, nominal net revenue collections grew by 536,08 percent.

“All revenue heads registered positive growth in nominal terms. After adjusting for inflation, net revenue grew by 86,78 percent in Q1 2021 as compared to the same period in 2020,” said the tax collector.

The growth in revenue during the period under review has been mostly attributed to revenue enhancement measures undertaken by Zimra and inflationary pressures affecting pricing models of goods and services in the economy.

Major contributors to net revenue collections for the quarter were: Companies (19,98 percent), Individuals (17,89 percent), Value Added Tax on local sales (13,48 percent), Excise Duty (12,51 percent) and VAT on Imports (9,76 percent).

On Companies, Zimra said the foreign currency auction system has assisted industry to maintain or expand operations as companies were able to acquire raw materials at official exchange rates.

“Extra efforts made by Zimra to carry out compliance enforcement programmes in the difficult circumstances enhanced revenue collections for the first Quarterly Payment Date (QPD).

“Relaxation of lockdown restrictions late into the quarter assisted companies to increase productivity, which resulted in improved revenue collections.”

Contributions from VAT on local sales were 13,48 percent though the quarterly target was missed by 20,71 percent.
Consumption by individuals and corporates was negatively affected during the Covid-19 lockdowns introduced in January 2021.

“Consumption was focused towards buying basic commodities, which are either exempt or zero rated,” said Zimra.

The VAT on Imports tax head contributed 9, 76 percent to total revenue and it narrowly surpassed the set target by 1, 09 percent.

Zimra said the performance under the above revenue head could have been better if no restrictions were imposed on trade and travel during the lockdown.

“Opening up of borders to the general public and all types of cargo will enhance its performance in the short-run as most companies will be importing various production requirements.”

On Customs Duty and Excise Duty the tax collector said both the revenue heads performed below the set targets because of the lockdowns.

The closure of ports of entry to the general public with the exception of trucks bringing in essential commodities affected revenue collections significantly, it said.

“Some traders opted to use undesignated crossing points where they were smuggling goods that were liable for duty
payments.
“As for Excise Duty, though the consumption of beer and wines was not affected, revenue collected from petroleum products declined as most companies had to close shop or maintain minimal operations.”

The Intermediated Money Transfer Tax revenue head during the period under review, performed above target as the majority of payments were processed through electronic platforms during the lockdown, which started early January through to February.

“Electronic payment systems have been convenient and they reduce the physical interaction of people during this pandemic,” said the authority.

On the ease of doing business, Zimra said it has been working around the clock to facilitate smooth running of operations even during the lockdown period through system automation.

System challenges were experienced at the beginning of the quarter as Zimra’s efforts to enforce fiscalisation coincided with the seasonal pressures resulting from tax clearance renewals.

As part of efforts to plugging of revenue leakage, restrictions on movement of vehicular and human traffic during the lockdown period created some risks to revenue collection as travelers opted to use undesignated ports of entry going in and out of the country.

“Through joint operations with the security departments and border management committees, efforts are being made to bring normalcy to facilitation of trade and travel.

“Furthermore, the fight against corruption has been elevated to higher levels as Zimra seeks to seize and auction vehicles that are found transporting smuggled goods,” it said. — @okazunga