Zimra collections 6% below target at $1.66 bln
THE Zimbabwe Revenue Authority collected $1.66 billion in the first half of 2015 against a target of $1.76 billion, a negative variance of 6%.
The latest performance report shows the majority of tax heads except carbon tax, VAT on imports and customs duty failed to meet their collection schedules.
The economic conditions continue to deteriorate characterised by liquidity constraints, limited lines of credit from financial institutions, power shortages, retrenchments and company closures.
Zimra chairman Willia Bonyongwe said such challenges have seen some clients failing to honour their tax obligations, resulting in the Authority failing to meet the set target for the first half of the year.
Net collections declined by 3% from the same period last year where $1.72 billion was collected.
Individual Tax contributed the bulk of the revenue collected in the first half of 2015, contributing 23%, followed by Excise Duty which contributed 21% to total revenue. Both VAT on Imports and VAT on Local Sales contributed 13% apiece.
Individual Tax collections amounted to $390 million, 3% below target due to increasing retrenchments and company closures.
The authority collected $167.5 million corporate tax against a target of $185 million. The collections were a decline of 15% from $196.5 million.
VAT net collections on local sales were at $212.8 million against a target of $316.3 million. Gross collections were however 16% ahead of budget at $366.5 million.
Net VAT on Local Sales contributed 13% to total revenue and 49.7% to total VAT revenue. There has been an 8.24% decline in net revenue collections as compared to the $231.9 million that was collected during the same period last year.
The authority says the performance was on the back of low disposable income in the hands of the consumers and a higher VAT refund bill of $153.8 million in the first half of 2015 as compared to $116.3 million that was refunded during the same period last year.
VAT on Imports contributed 13% to total revenue and 50.3% to total VAT revenue after collections of $215.2 million.
Customs Duty collections amounted to $160.4 million against a target of $183.0 million, resulting in a negative variance of 12%. During the same period last year, $137.0 million was collected. This translates to a 17% increase in revenue collections.
The authority noted that performance was affected customs duty suppressing instruments which enabled the importation of goods under rebates, trade agreements and concessions. A total of $436.9 million was foregone during the first half of the year.
A total of $346.2 million was collected under excise duty against a target of $285 million, resulting in a positive variance of 21%. Excise Duty on Fuel was the main contributor to total Excise Duty revenue, with a contribution of 77%. Excise Duty on Beer and Airtime contributed 10% and 6% respectively. The remainder of the revenue was realised from Excise Duty levied on tobacco, wines and spirits, second-hand motor vehicles and electric lamps. During the same period last year, a total of $241.4 million was realised from Excise Duty. This translates to a 43% increase in this year’s revenue collections.
During the first half of the year, $17.4 million was collected as Carbon Tax against a target of $15.1 million, resulting in a positive variance of 15%. During the same period last year, $17.2 million was collected.
Mining Royalties contributed $39.8 million against a target of $64.9 million, which translates to a negative variance of 39%. There has been a 65% decline in revenue collections as compared to the same period last year where $112.6 million was collected. -FinX