Zimra surpasses H1 target

Source: Zimra surpasses H1 target | Herald (Business)

Africa Moyo Business Reporter
THE Zimbabwe Revenue Authority (Zimra) performed beyond expectations in the first half of 2018 after gross collections hit $2,41 billion against the budgeted $2,10 billion, driven by excise duty, net value added tax on local sales and individuals.

This means the tax collector surpassed the set target by 15,09 percent.

After deducting refunds of $98,88 million for the first half, net collections were $2,31 billion, representing a 10,37 percent jump from the expected $2,10 billion.

The first half collections represent a 53,48 percent of the annual target of $4,3 billion.

In a revenue report for the half year ended June 30, 2018, Zimra board chairperson Mrs Willia Bonyongwe says net revenue collections improved by 35,94 percent from the $1,70 billion realised in the first half of 2017.

Excise duty contributed 19 percent to first half revenues while net VAT on local sales accounted for 18 percent.

Individuals also contributed 18 percent to the $2,41 billion collected in the first half.

Mrs Bonyongwe said the positive revenue performance is attributed to “the Authority’s various revenue enhancement projects, increased use of automation and a resolute stance against corruption”.

“The current inflationary environment and the widespread use of plastic and mobile money tr0ansactions also enhanced revenue collections in nominal terms, especially for revenue heads such as VAT,” said Mrs Bonyongwe.

However, Mrs Bonyongwe said while the rest of the tax heads performed above expectations, three revenue heads; individuals, net VAT on local sales and other indirect taxes, performed below expectations.

“The performance of the net VAT on local sales is disturbing not only because the variance is so huge, but also because the revenue head had picked up remarkably following the introduction of the 10 percent withholding tax.

“Zimra has strengthened controls in the payment of VAT refunds to curb fraudulent payments. In the past the Authority was refunding VAT which had not yet been collected and will continue audit of refunds and enforcing payments of withholding tax, especially for non-compliant or unregistered taxpayers,” she said.

The individual tax head contributed $416,42 million against a target of $419,28 million. This represents a negative variance of -0,68 percent.

Although the revenue head marginally fell short of the target, revenue collections grew by 19,86 percent from the $347,41 million recorded in the same period last year.

Mrs Bonyongwe said the performance of the revenue head was partly affected by salary cuts, retrenchments and irregular salary payments during the greater part of the first half despite the fact that some organisations offered back-pays, salary adjustments and performance awards.

Net VAT on local sales clocked $430,08 million against a target of $472,3 million, which indicates a -8,94 percent variance.

Revenue collections from VAT on imports were $252,62 million against a target of $201,20 million, resulting in a positive variance of 25,56 percent.

A 33,94 percent growth in revenue collections was recorded during the first half of 2018 compared to $188,60 million that was collected during the same period last year.

Going into the second half of the year, Mrs Bonyongwe says the prospects and revenue projections against anticipated increased business activity “look positive”.

She believes if the revenue collection trend continues, Zimra will exceed the 2018 target of $4,3 billion.

“The Authority projects a growth driven by increased economic activity, the honouring of payment plans by companies that took advantage of the amnesty and continued efforts to encourage voluntary compliance and enforcement activities against delinquent taxpayers.

“With a thrust towards voluntary compliance, the Authority will expand taxpayer education and engagement, simplify compliance processes and encouraging voluntary disclosure,” said Mrs Bonyongwe.