Zimbabwe’s tax agency says net revenue collections in the first quarter of the year were 16 percent below target at $724 million, as most tax heads underperformed in the struggling economy.
The Zimbabwe Revenue Authority (ZIMRA) today reported that gross revenue collection amounted to $782 million and refunds consisting of Value Added Tax (VAT) and Customs duty stood at $57 million.
Net collections were at $724.9 million, down nine percent compared to the first quarter last year, against a target of $861.8 million.
ZIMRA chairperson Willia Bonyongwe said the authority was struggling to contain a tax debt which rose by 31 percent to $2.58 billion in the quarter.
Parastatals, state-owned enterprises and the private sector accounted for a combined 73 percent of the debt. Municipalities owe 26.7 percent of the debt while government has a 0.18 percent share of the debt.
“It is noteworthy that the debt is composed of 53.1 percent as principal while penalties and interest are 20.2 percent and 26.6 percent respectively,” she said.
The bulk of the revenue was realised from individual tax at 23 percent with excise duty at 22 percent. VAT on local sales contributed 18 percent while VAT on imports contributed 11 percent.
Revenue from excise duty amounted to $160 million compared to $165.4 million in the same quarter last year. Excise duty fell short of the $179 million target.
Excise duty on fuel was the main contributor to the revenue head with a contribution of 79 percent. Duty on beer and airtime contributed 8.92 percent and 6 percent respectively with the remainder coming from excise duty on tobacco, second hand vehicle and electric lamps.
Individual tax was down 16 percent to $167. 4 million, against a target of $196 million, reflecting the impact of job losses and pay cuts for those still employed as companies struggle to survive.
The pay as you earn (PAYE) debt at the end of the quarter stood at $692 million up from $578 million last year.
“This largely reflects the incapacity of most companies to pay, some of which may no longer be operational. In the short term, this tax head will remain under pressure and performance is not expected to improve all things remaining equal,” she said.
The mining sector performed poorly with royalties contributing a mere two percent as revenue declined 31 percent to $13.3 million. Collections from sector were 45 percent below target.- The Source