via Govt sinks deeper in fiscal crisis – The Zimbabwe Independent March 23, 2015
GOVERNMENT is irretrievably sinking deeper into a fiscal crisis as Zimbabwe’s tax base continues to shrink, while revenue collections dwindle at an alarming rate amid a severe liquidity crunch which has spawned low capacity utilisation, company closures and job loses.
Faith Zaba
Since the beginning of the year at least 600 workers have been retrenched, in addition to 9 000 retrenched in 2014.
Finance minister Patrick Chinamasa said in his 2015 budget statement more than 55 000 people had been laid off and 4 600 companies closed since 2011.
As a result, the Zimbabwe Revenue Authority (Zimra) has failed yet again to meet its target, with figures from January indicating a 14% revenue decline.
Zimra acting director for legal and corporate services Robert Mangwiro said this week net collections from January to date have amounted to US$468,53 million against a target of US$542,08m.
“The local economy has been facing a myriad of challenges for the past decade due to factors such as liquidity constraints, power outages and low industrial capacity utilisation,” he said.
“One of the consequences of these has been the failure by industry to settle tax obligations with some taxpayers accumulating unsustainable tax debts, which have so far accumulated to over US$1 billion.”
Revenue collection was particularly poor in the fourth quarter of 2014, with the trend continuing in 2015. The fourth quarter net collections were US$996,94m against a target of US$1,1bn, translating to a negative variance of 10%.
Zimra’s net collections for 2014 were US$3,6bn against a target of US$3,82bn, a negative variance of 6%.
Mangwiro said “this trend clearly calls for extraordinary measures”, hence the introduction of the tax amnesty to raise more revenue to boost Treasury’s depleted coffers.
Government’s revenue target for 2015 is US$3,951bn of which US$3,76bn is supposed to come from tax. After the expiry of the tax amnesty on March 31, Zimra plans a lifestyle audit and crackdown on the rich and famous.
COMMENTS
The problem is that ZIMRA base their collections on “assessed revenue” which includes their 100% ( illegal !!!!) penalties. Their own incompetence and lack of appreciation of business ( disallowing office teas as it constitutes a benefit ??? My God, what are we coming to that we cannot give our staff a cup of tea and a meal after the hard ships they endure on a daily basis in this mis-governed economy ?? The time for civil revolt is fast approaching.
There is no way that our beloved country can recover as long as these fools are in charge. We have to precipitate regime change
When Zim were warned in 2000 that the downside of the land issue would be huge they ignored it.Zim has always been a agric based economy and when you kill that you are stuffed.Enjoy what you sowed!!!!
It is very welcome news to hear the tax revenue is shrinking so fast. 98% of it goes to Range Rovers and farm inputs and beer for the Chefs anyway… so let it shrink further. No problem.