Business / Economy
Zimra misses revenue targets
24 Apr 2015 at 16:36hrs | Views
The Zimbabwe Revenue Authority missed its first quarter revenue collection targets by 6 percent as poor economic conditions continue to affect inflows to the fiscus.
Net collections amounted to $803,2 million against a target of $850 million with the bulk of the revenue realised from Value Added Tax (VAT), Individual Tax and Excise Duty.
Zimra commissioner general Gershem Pasi said individual tax and excise duty contributed 25 percent and 21 percent respectively to total revenue while both VAT on local sales and imports contributed 13 percent each.
The taxman collected $200,2 million under the individual tax head against a target of $192,0 million, resulting in a positive variance of 4 percent. The figure was 4 percent up on the same period last year after $193,3 million was realised under the revenue head in 2014.
"The performance of the revenue head can be attributed to improved compliance levels from clients following intensive investigations, audits and follow- ups carried out by the Authority," said Mr Pasi.
Company tax contributed $71,6 million to total revenue against a target of $81 million, translating to a negative variance of 12 percent.
Mr Pasi said collections under this revenue head are expected to improve in the next quarter as 25 percent of the forecast tax liability will be paid when the second Quarterly Payment Dates (QPDs) become due in June.
Carbon tax collections for the period under review stood at $8,4 million against a target of $7,6 million, resulting in a positive variance of 11 percent.
Gross VAT collections in the quarter amounted to $200,5 million against a target of $157,9 million.
Net collections were $107,8 million against the targeted $157,9 million, which translates to a negative variance of 32 percent.
There was a 4 percent increase in VAT on local sales revenue from the $103,8 million that was collected during the first quarter of 2014.
The performance of VAT on local sales was attributed to the decline in the manufacturing sector capacity utilisation to around 36,3 percent as well as the low disposable income in the hands of consumers. VAT on imports stood at $105,6 million against a target of $96,1 million, resulting in a positive variance of 10 percent.
The collections from imports were 86 percent up on the $56,8 million collected during the same period in 2014 due to an increase in the importation of goods which attract VAT.
Customs Duty collections amounted to $78,3 million missing the target of $86 million by 9 percent due to the $195,9 million customs duty that was foregone through various duty suppressing instruments in the period.
Excise duty was 19 percent above targets at $165,4 million against $139,0 million. Excise duty on fuel contributed 78 percent of the total collections while duty on beer contributed 11 percent.
The remainder of the revenue was realised from tobacco, wines and spirits, second-hand motor vehicles, electric lamps and airtime.
During the same period last year, $109,8 million was realised from excise duty translating to a 51 percent increase in this year's revenue collections.
Mining Royalties were 40 percent below target bringing in $19,6 million against a target of $32,5 million as depressed international prices of minerals continue to weigh down on mining companies.
Revenue collections from other taxes amounted to $46,4 million against a target of $57,9 million, resulting in a negative variance of 20 percent.
This was mainly because the tobacco levy failed to meet the set targets due to depressed tobacco prices at the beginning of the selling season and low performance of capital gains taxes and capital gains withholding taxes due to poor performance of both the local bourse and the properties market.
Mr Pasi said the extension of the period for accepting tax amnesty applications to 30 June 2015 should provide an opportunity for those clients who failed to meet the original deadline to submit their applications, and to process payment by 31 December 2015.
"I, therefore, urge all our valued clients to take full advantage of this extension and submit their applications by 30 June 2015 as there will be no further extension," he said.
Net collections amounted to $803,2 million against a target of $850 million with the bulk of the revenue realised from Value Added Tax (VAT), Individual Tax and Excise Duty.
Zimra commissioner general Gershem Pasi said individual tax and excise duty contributed 25 percent and 21 percent respectively to total revenue while both VAT on local sales and imports contributed 13 percent each.
The taxman collected $200,2 million under the individual tax head against a target of $192,0 million, resulting in a positive variance of 4 percent. The figure was 4 percent up on the same period last year after $193,3 million was realised under the revenue head in 2014.
"The performance of the revenue head can be attributed to improved compliance levels from clients following intensive investigations, audits and follow- ups carried out by the Authority," said Mr Pasi.
Company tax contributed $71,6 million to total revenue against a target of $81 million, translating to a negative variance of 12 percent.
Mr Pasi said collections under this revenue head are expected to improve in the next quarter as 25 percent of the forecast tax liability will be paid when the second Quarterly Payment Dates (QPDs) become due in June.
Carbon tax collections for the period under review stood at $8,4 million against a target of $7,6 million, resulting in a positive variance of 11 percent.
Gross VAT collections in the quarter amounted to $200,5 million against a target of $157,9 million.
Net collections were $107,8 million against the targeted $157,9 million, which translates to a negative variance of 32 percent.
There was a 4 percent increase in VAT on local sales revenue from the $103,8 million that was collected during the first quarter of 2014.
The performance of VAT on local sales was attributed to the decline in the manufacturing sector capacity utilisation to around 36,3 percent as well as the low disposable income in the hands of consumers. VAT on imports stood at $105,6 million against a target of $96,1 million, resulting in a positive variance of 10 percent.
The collections from imports were 86 percent up on the $56,8 million collected during the same period in 2014 due to an increase in the importation of goods which attract VAT.
Customs Duty collections amounted to $78,3 million missing the target of $86 million by 9 percent due to the $195,9 million customs duty that was foregone through various duty suppressing instruments in the period.
Excise duty was 19 percent above targets at $165,4 million against $139,0 million. Excise duty on fuel contributed 78 percent of the total collections while duty on beer contributed 11 percent.
The remainder of the revenue was realised from tobacco, wines and spirits, second-hand motor vehicles, electric lamps and airtime.
During the same period last year, $109,8 million was realised from excise duty translating to a 51 percent increase in this year's revenue collections.
Mining Royalties were 40 percent below target bringing in $19,6 million against a target of $32,5 million as depressed international prices of minerals continue to weigh down on mining companies.
Revenue collections from other taxes amounted to $46,4 million against a target of $57,9 million, resulting in a negative variance of 20 percent.
This was mainly because the tobacco levy failed to meet the set targets due to depressed tobacco prices at the beginning of the selling season and low performance of capital gains taxes and capital gains withholding taxes due to poor performance of both the local bourse and the properties market.
Mr Pasi said the extension of the period for accepting tax amnesty applications to 30 June 2015 should provide an opportunity for those clients who failed to meet the original deadline to submit their applications, and to process payment by 31 December 2015.
"I, therefore, urge all our valued clients to take full advantage of this extension and submit their applications by 30 June 2015 as there will be no further extension," he said.
Source - BH24
