Zimbabwe Revenue Authority misses quarterly target

via Zimbabwe Revenue Authority misses quarterly target October 25, 2013  NewsDay

THE Zimbabwe Revenue Authority (Zimra) has missed its quarterly revenue collection target quarter weighed down by subdued mining royalties and declining industrial output, the authority has said.

In its revenue performance report for the of the third quarter ending September, the authority reported that collections amounted to $897,3 million against a target of $904,9 million, resulting in a negative variance of 1%.

While total income has marginally missed the target, recurrent expenditure has continued to gobble the trickling revenues, further limiting fiscal space.

Value-added tax contributed 32% of the total revenue collected, followed by individual tax (24%), while excise duty was third with a contribution of 15%.

Turning to mining royalties, the tax collector reported that third quarter collections stood at $39 million against a target of $63,7 million due to fluctuations in international prices of minerals.

The report further stated that royalties from diamonds were negatively affected by the placing of some diamond mining companies under sanctions.

Zimra, however, expressed optimism that the lifting of sanctions imposed by the European Union on State-owned mining arm Zimbabwe Mining Development Corporation would boost mining royalties.

The issue of royalties, generally seen has too high compared with regional peers, has been widely debated in the industry forcing government to consider revising them should mining companies beneficiate the minerals.

According to the World Bank, the mining sector has to date been the most dynamic sector of the economy, leading the 2009-2011 rebound with average annualised growth of 35,5% and contributing 3,7 percentage points to overall gross domestic product growth of 8,4% during the period under review.

Company tax according to the report accounted for $102,4 million of the total revenue collected against a target of $105,2 million.

“As indicated in the Confederation of Zimbabwe Industries Manufacturing Survey report, industrial capacity utilisation dropped from 44,6% in 2012 to 39,6% in 2013. This has negatively impacted on the performance of many comoanies, and consequently on the performance of the revenue head,” said Zimra board chairperson Sternford Moyo.