Source: Zimra records 4pc rise in revenue collection | The Herald January 19, 2017
Walter Muchinguri Assistant Business Editor —
The Zimbabwe Revenue Authority recorded a 4 percent jump in revenue collected during the fourth quarter compared to third quarter as it continues to reap the benefits of several revenue enhancement measures it has been rolling out since last year.
During Q4 Zimra collected $893,89 million compared to $854,17 million for Q3. The figure was however, 4 percent shy of the $935,17 million target.
Net collections for the quarter stood at $843,74 million after the deduction of refunds of $50,15 million.
The improvement in revenue collection has seen Zimra reducing the variance between actual and targeted collection from 15,89 percent in Q1 to 7,56 percent in Q2 and 6,89 percent in Q3 and 4.
Revenue collected last year amounted to $3,462 billion, which was 96 percent of the targeted $3,607 billion and about 10 percent less than $3,88 billion collected in 2015.
Zimra board chairperson Mrs Willia Bonyongwe said that the revenue enhancement measures underpinned by automation have had a positive impact on revenue collection.
“Despite the prevailing economic challenges, in 2016 the Zimbabwe Revenue Authority stepped up its efforts to collect revenue for the fiscus. The Revenue Authority put in place and accelerated several revenue enhancement measures to increase the tax base, the compliance rate, and enforcement by the revenue officers.
“The major force behind all these measures being automation in the form of completing the Fiscalisation process, serious rolling out of the Tax Management System, the introduction of the Cargo Tracking System and the use of various databases from related stakeholders to catch up tax evaders
“All these measures had tangible positive impact to the revenues especially in the second half of 2016, which clearly indicate an upward trend in some tax heads despite the decline in the economy,” she said.
In terms of the revenue mix, Individual Tax contributed 22,68 percent to gross collections for the year followed by Excise Duty 19,71, Net Value Added Tax (VAT) on Local Sales 18,51 percent, Company Tax 10,49 percent and Customs Duty 8,39 percent.
Mrs Bonyongwe said collections were negatively affected by growing debt.
“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.
“Most people do not take their tax obligations seriously and due to corruption have gotten away with it in the past but the system has caught up with them.
“There is also a noticeable increase in litigation from non-compliers and we hope that the Judiciary will allow these cases to be heard quickly and we commend the introduction of the Fiscal Court in this regard,” she said.
However, Individual Tax contributions to overall revenue collected grew from 22 percent in 2015 to 23 in 2016, while that of VAT on Local Sales grew from 15 percent to 18 percent, Mining Royalties from -1 percent to 2 percent and Other Taxes 1 percent to 2 percent.
Individual Tax collections for 2016 amounted to $736,53 million, which is 91,82 percent of the targeted $802,14 million, translating to a decline of 5,31 percent from the $777,83 million collected in 2015.
Gross VAT on Local Sales collections for the year amounted to $812,82 million against a target of $610,10 million, resulting in a positive variance of 33,23 percent. VAT refunds for the year amounted to $211,60 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.
Going forward, Mrs Bonyongwe said there was need for people and organisations to continue to honour their tax obligations.
“The failure to surpass revenue targets in 2016 is largely due to the prevailing harsh economic conditions but, like indicated previously, an unwillingness to meet tax obligations by economic agents.
“If Zimbabwe is to develop, there is need for a paradigm shift in the way we view this obligation across the board. We cannot afford to have enclaves who do not pay tax,” she said.