News / National
Zimra intensifies audits
29 Oct 2020 at 06:20hrs | Views
The Zimbabwe Revenue Authority (Zimra) has intensified audits as part of efforts to plug revenue leakages on Zimbabwe's ports of entry amid indications the economy is losing billions annually through smuggling and customs loopholes at border posts.
Zimra's board vice-chairperson, Josephine Matambo, said the country's tax collector continue to focus on its strategic role of supporting the Transitional Stabilisation Programme in the three areas namely the plugging of revenue leakages, restoration of fiscal balance and ease of doing business.
"The authority continued to implement risk and sector- based audits to plug revenue leakages as it works towards efficient domestic revenue mobilisation," Matambo said.
"Customs enforcement activities in the form of roadblocks and border patrols were increased during the quarter (to September 30, 2020) to curb smuggling that had increased due to the closure of border posts to private travel."
She said the government has committed itself to supporting antismuggling measures that are being implemented by Zimra.
This has seen the introduction of drones as part of measures to curb smuggling along the country's borders.
Despite challenges Zimbabwe's tax payers faced during the quarter to September 30,2020, Zimra registered solid performance.
Gross collections for Zimra stood at ZWL$58.81bn during the reviewed period, which was 31.19% above the targeted ZWL$44.83bn.
The tax collector's net revenue collections were ZWL$57bn against a target ZWL$44.83bn.
Zimra collected ZWL$6.42bn in the prior comparative period, reflecting an increase of 788.16%.
All revenue heads registered positive growth in nominal terms. Individuals contributed 15.26% to net revenue collections for the quarter, while companies contributed (14.63%), excise duty (14.17%), VAT on Local Sales (13.24%) and VAT on Imports (13.08%).
The revenue head recorded positive performance due to continuous salary adjustments and cost of living adjustments that employers offered to their employees to cushion them from high inflation.
Zimra missed its ZWL$5.86bn target for the Intermediated Money Transfer Tax (2%) collections by ZWL$1.94bn.
The contribution represented 6.86% to total revenue for the quarter.
This was partly due to the monetary policy interventions introduced to harness the local currency depreciation that was threatening economic stability.
Mining Royalties, Withholding Taxes and Other Taxes also missed the quarterly targets, mainly due to operational challenges in the mining sector caused by energy shortages and the Covid19 pandemic.
The Authority, however, performed better in Q3 2020 compared to the same period last year; this is attributed to inflationary pressures that the country has been experiencing during the greater part of 2020.
Zimra implemented several revenue enhancement measures during the third quarter of 2020, including checking compliance status of VAT operators trading in foreign currency, debt follow-ups and stricter monitoring of debt payment plans, specific sector and tax type audits as part of risk management.
Digital audits are also being carried out to reduce physical interaction and exposure to Covid-19.
Also, excise manufacturers and bonded warehouses compliance checks were intensified.
The positive performance during the quarter was mainly driven by the relaxation of lockdown conditions which resulted in more businesses resuming operations, restrictions of imports in line with Covid-19 measures which led to an increased demand for locally produced goods, as well as ongoing compliance enforcement projects which the Authority is implementing.
Zimra expects to in the last quarter of the year with the target increased to ZW$172 bn.
The growth is expected to come from increased productivity with the opening up of more business sectors in the economy.
In addition, the government's strategy to target low hanging fruits in various sub-sectors of the manufacturing industry is expected to attract the much- needed investment for domestic production.
South Africa has opened its borders and cross-border trade is therefore expected to increase thereby feeding into higher collections in import duties.
Covid-19 lockdown conditions were relaxed, enabling more businesses to resume operations, thereby enhancing their ability to meet their tax obligations.
Matambo said the monetary policy interventions that were done during this period inflated the amounts to be collected resulting in a corresponding positive impact to the revenues.
Zimra's board vice-chairperson, Josephine Matambo, said the country's tax collector continue to focus on its strategic role of supporting the Transitional Stabilisation Programme in the three areas namely the plugging of revenue leakages, restoration of fiscal balance and ease of doing business.
"The authority continued to implement risk and sector- based audits to plug revenue leakages as it works towards efficient domestic revenue mobilisation," Matambo said.
"Customs enforcement activities in the form of roadblocks and border patrols were increased during the quarter (to September 30, 2020) to curb smuggling that had increased due to the closure of border posts to private travel."
She said the government has committed itself to supporting antismuggling measures that are being implemented by Zimra.
This has seen the introduction of drones as part of measures to curb smuggling along the country's borders.
Despite challenges Zimbabwe's tax payers faced during the quarter to September 30,2020, Zimra registered solid performance.
Gross collections for Zimra stood at ZWL$58.81bn during the reviewed period, which was 31.19% above the targeted ZWL$44.83bn.
The tax collector's net revenue collections were ZWL$57bn against a target ZWL$44.83bn.
Zimra collected ZWL$6.42bn in the prior comparative period, reflecting an increase of 788.16%.
All revenue heads registered positive growth in nominal terms. Individuals contributed 15.26% to net revenue collections for the quarter, while companies contributed (14.63%), excise duty (14.17%), VAT on Local Sales (13.24%) and VAT on Imports (13.08%).
The revenue head recorded positive performance due to continuous salary adjustments and cost of living adjustments that employers offered to their employees to cushion them from high inflation.
Zimra missed its ZWL$5.86bn target for the Intermediated Money Transfer Tax (2%) collections by ZWL$1.94bn.
This was partly due to the monetary policy interventions introduced to harness the local currency depreciation that was threatening economic stability.
Mining Royalties, Withholding Taxes and Other Taxes also missed the quarterly targets, mainly due to operational challenges in the mining sector caused by energy shortages and the Covid19 pandemic.
The Authority, however, performed better in Q3 2020 compared to the same period last year; this is attributed to inflationary pressures that the country has been experiencing during the greater part of 2020.
Zimra implemented several revenue enhancement measures during the third quarter of 2020, including checking compliance status of VAT operators trading in foreign currency, debt follow-ups and stricter monitoring of debt payment plans, specific sector and tax type audits as part of risk management.
Digital audits are also being carried out to reduce physical interaction and exposure to Covid-19.
Also, excise manufacturers and bonded warehouses compliance checks were intensified.
The positive performance during the quarter was mainly driven by the relaxation of lockdown conditions which resulted in more businesses resuming operations, restrictions of imports in line with Covid-19 measures which led to an increased demand for locally produced goods, as well as ongoing compliance enforcement projects which the Authority is implementing.
Zimra expects to in the last quarter of the year with the target increased to ZW$172 bn.
The growth is expected to come from increased productivity with the opening up of more business sectors in the economy.
In addition, the government's strategy to target low hanging fruits in various sub-sectors of the manufacturing industry is expected to attract the much- needed investment for domestic production.
South Africa has opened its borders and cross-border trade is therefore expected to increase thereby feeding into higher collections in import duties.
Covid-19 lockdown conditions were relaxed, enabling more businesses to resume operations, thereby enhancing their ability to meet their tax obligations.
Matambo said the monetary policy interventions that were done during this period inflated the amounts to be collected resulting in a corresponding positive impact to the revenues.
Source - businesstimes
