Zimbabwe’s tax agency says it is investigating an unusual increase in tax refunds paid out in the second half of the year which it blames for a seven percent decline in annual revenue collections.
The Zimbabwe Revenue Authority (ZIMRA) yesterday reported that annual gross collections for 2016 amounted to $3.4 billion falling four percent short of the $3.6 billion target.
“Net collections amounted to $3.248 billion but were 91 percent of the target. They were affected by an upsurge in refunds in Q3 and Q4 and the Authority is investigating what caused that surge,” ZIMRA said.
Gross VAT on Local Sales collections for the year amounted to $812.82 million against a target of $610.10 million. VAT refunds for the year amounted to $211.60 million, resulting in net collections of $601.22 million.
Individual Tax amounted to $736.53 million making up 23 percent of total revenue. Compared to last year Individual Tax declined 5.3 percent.
Company Tax contributed $340.72 million to total collections during the year. This was 18 percent down from the 2015 collections of $424.68 million and seven percent shy of the targeted $366.40 million.
ZIMRA noted that revenue collections were negatively affected by the growing debt which had accumulated to $2.67 billion at the close of 2016 from $1.97 billion in 2015.
During 2016, ZIMRA managed to recover $1.11 billion in outstanding debt while the Corporate Income Tax debt went up from $474.97 million in 2015 to $751.49 million.
The Pay as You Earn debt as at the end of the year was $662.16 million, compared to $591.89 million in 2015 as most companies reviewed their remuneration packages downwards in an attempt to manage costs and stay afloat.
Revenue collections under VAT on Imports went down by 18.7 percent from the $440.65 million realised in 2015 to $358.25 million in 2016.
Revenue from Excise Duty amounted to $640.30 million against a target of $751.70 million. Collections decreased by 10 percent from the $714.22 million collected in 2015.
Excise Duty on fuel contributed 80 percent to this tax head. Beer and Airtime contributed eight percent and six percent respectively. The rest of the revenue was from Excise Duty on Tobacco, Wines and Spirits, Second-Hand Motor Vehicles and Electric Lamps.
Mining royalties only contributed $62.90 million, which translates to 57 of the targeted $110 million.-The Source