Use tax to cushion vulnerable communities, govt urged

Source: Use tax to cushion vulnerable communities, govt urged – NewsDay Zimbabwe

GOVERNMENT has been urged to ensure that part of the money collected through taxes is used to cushion vulnerable communities against the high cost of living.

The call came after the Zimbabwe Revenue Authority (Zimra) on Monday claimed that it had surpassed revenue targets in the fourth quarter of 2021, collecting $161 billion against a target of $108,17 billion.

Zimra attributed this to intermediated money transfer tax (IMMT), which contributed 10,48% to the quarterly revenue.

In 2018, Finance minister Mthuli Ncube introduced a 2% tax (IMMT) on every dollar transacted.

In an analysis of Zimra’s tax revenues yesterday, the Zimbabwe Coalition for Debt and Development said any increases in tax collections should translate to quality and affordable public services, social protection nets and infrastructural development.

“For Zimbabwe, the opposite is the case as the rising tax collections trigger the rising cost of living and continued price increases for basic goods and services. The government is failing to cushion the vulnerable groups from the devastating impacts of the COVID-19 pandemic,” the debt watchdog said in a statement.

“Apart from value erosion through depreciation, indications are that collected revenues are being abused, misused, misappropriated, and diverted for private gain by public officials. This is evidenced by the findings of the Auditor-General reports for 2019 that showed a lack of transparency in government.”