HomeBusinessVAT boosts Zimra collections

VAT boosts Zimra collections

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TAX collector, Zimbabwe Revenue Authority (Zimra), says Value Added Tax was the highest contributor to government revenue in the first quarter with 25% of the amount raised, but customs duty collections slumped to $71,2 million against a target of $96,5 million.

NQOBILE BHEBHE
CHIEF REPORTER

Gershom Pasi, the authority’s commissioner-general said net revenue collections for the first quarter slightly surpassed the targeted $817,9 million as $834,6 million was collected resulting in a positive variance of 2%.

Last year, Zimra collected total revenue of $3,4 billion, 6% short of a $3,6 billion target.

Pasi said customs duty is not expected to improve as liquidity challenges continue to negatively impact the importation of goods by industry.

“Customs duty collections amounted to $71,2 million against a target of $96,5 million, resulting in a negative variance of 26%,” he said in the revenue performance report for the first quarter of 2014.

“During the same period last year, $89,5 million was collected resulting in a decline in revenue of 20%.

“This is attributed to the lack of lines of credit in the economy which negatively affected local industry’s capacity to finance the importation of goods.

“The suspensions and concessions also negatively affected revenue collections from customs duty.

“During the first quarter of 2014, $126,5 million was forgone with 96% being revenue forgone from customs duty.

“The performance of the revenue head is not expected to improve significantly as liquidity challenges continue to negatively impact the importation of goods by industry” he said.

Under individual tax, Zimra collected $193,3 million against a target of $168 million, resulting in a positive variance of 15%.

However, during the same period last year, $172,7 million was realised which translates to a 12% growth in revenue. In the period under review, Zimra registered a 22% increase in revenue collections from companies.

“Corporate Income Tax amounted to $104,7 million against a target of $88 million resulting in a positive variance of 19%.

“There has been a 22% increase in revenue collections from companies from the $85,6 million that was collected during the same period last year.

“The performance of the revenue head can be attributed to intensified efforts by Zimra to enforce
compliance through follow-ups and audits.”

Tobacco levy accounted for $1,9 m against a target of $2,8 m resulting in a negative variance of 31% and lower current tobacco prices as compared to 2013 prices has been attributed to the drop although volumes are higher this year.

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