Source: Zimra to enforce more revenue collection strategies | The Herald October 21, 2016
Business Reporter —
THE Zimbabwe Revenue Authority has added nearly 4 000 tax players to the revenue collection system and will enforce more revenue collection strategies from January next year. Faced by declining revenue collection owing to a shrinking tax base, Zimra will also intensify anti-corruption campaigns and tax educationto simplify processes.
The new tax players were added to the tax net through the automation of the revenue collector’s systems. Zimra chairperson Mrs Willia Bonyongwe said the automation system has helped increase efficiency which has minimised corruption.
“One of the methods (to deal with tax threats) is to increase compliance and we do that by increasing efficiency, enforcements and this is done through automation. You get orders to supply to (for example) Zesa or big mines but the taxman does not know you.
“When we automate or connect with those companies your name will be flashed out. We have been able to net in about 4 000 tax players, who are real big players, who were outside our tax base,” said Mrs Bonyongwe.
Automation enhances, convenience, efficiency and accuracy. Without automation, under-declarations can be as high as 60 percent of what is brought before the taxman, according the Zimra chairperson. Tax avoidance and evasion have contributed to the contraction in revenue collections in the country as companies and individuals dodge the taxman.
Mrs Bonyongwe said there was a threat to the sustainability of the country’s tax system emanating from the challenging economic environment. Company closures, reduced capacity utilisation, liquidity constraints and deflationary pressures resulted in companies failing to meet their tax obligations. Yet tax revenue is one of the major sources of income for the country.
Mrs Bonyongwe said corruption and informality of the economy have also added to threats to tax base sustainability. Corruption, she said, was a cause for concern as it was threatening the entire economy. This is despite the fact there is still some economic activity particularly with the boom in the informal sector.
“There is recognition the tax base has shrunk, but it is still there because we see people driving expensive vehicles and developing mansions that are not on mortgages.
“There is a shift in the economy, which makes it difficult to see what is happening and what to collect. People are running businesses in their homes and making money,” she said.
To tackle threats to revenue collections, Zimra said it was intensifying anti-corruption campaigns, tax education to simplify processes as well as enforce fiscalisation beginning January next year.
In the six months to June 2016, Zimra missed revenue collection target by 6 percent, while collections for the period were 9 percent lower than same period last year. The revenue authority achieved $1,65 billion against a target of $1,75 billion on economic challenges. However, revenue collections for the quarter to September were $919 million, ahead of the target of $917 million
COMMENTS
I know this is very hard for ZANU to understand, but if you destroy the businesses that pay tax there will be less money for Zanu’s to steal and abuse. You guys will have to find ways of slimming down. The glory days are over
These idiots are trying to put a plaster on a bullet hole. Oh wait, there are no plasters. I think the surrounding countries should just lock their borders with Zimbabwe and throw away the keys.
As the last corespondent says, this are no simple & painless solution as is made out. If you have no income, you have noting to spend as a result of no Tax collected, vicious loop of nothing. You can of course ensure that is what is due to Cesare is payed to Cesare, but it is difficult to get the last few Cents out of the system and may not be worth it. So looking at a near Zero situation is in practical terms Zero
It is possible to estimate the tax that could possibly be collected from the GDP. Some countries have a high tax-to-GDP ratio; Sweden, for example, had a tax-to-GDP ratio of 35% as of 2014. Estonia, on the other hand, had a very low 1% tax-to-GDP ratio in 2014. As of 2014, the U.S. tax-to-GDP ratio was 11.7%. This of course is providing non of it goes missing.
So at the bottom of the argument is that if there is no business going on there will be no tax collected i.e ?% of Zero is Zero.
The matter of what you send it on it something different – To have salaries that gobble up nearly 100% of this tax is impossible to sustain. There is nothing left for anything else. However cutting this probably will reduce tax collected further, which is why it should never get anywhere near 100%. Which leads to the money in the pocket problem. IF the business in not there- no money in pockets, so naturally there is leas tax coming in and by natural human nature, what is due is not paid or cheated on. You can artificially boost this by various means such as, spending more on infrastructure (Remember YOU do not have this sort of money in any case, because you have left it too late? and I do not mean nice toys and the like) or other more dubious means such as increasing the ‘coinage’. But with that basically everything remains the same, the thing just re-adjusts to the same value with a different face (worth) value on the currency.
The only way is to , spend less on servicing monthly repeating expenditure , conserve what you have, be frugal, invest in getting business up and running again / better. And stop any hemorrhaging.
Reading the posts it would appear that you do really have anybody who can understanding very simple economics.
Every dollar that is taken from businesses is one dollar less for productive investment. Government is not productive. Do these clowns not understand this fundamental fact.