Zimra surpasses set targets

The country's tax collector, Zimbabwe Revenue Authority (Zimra), says its collections for the three months to December surpassed the revised set targets.

Net collections for the period under review amounted to $91,51 billion resulting in a positive variance of 8,44 percent against the target.

For the full year, Zimra collected net revenue of $182,59 billion against a target of $171,90 billion for the year ending  December 31, 2020 and this translated to 6,22 percent above target.

Zimra vice-board chairperson, Josephine Matambo, attributed the positive performance to a cocktail of fiscal and monetary measures introduced by the Government.   

She said the measures brought about "the much-needed stability that enhanced businesses viability and bolstered revenue inflows".

"This was augmented by the authority's revenue enhancement strategies and an effective business continuity plan that ensured safety of both staff and clients," Mrs Matambo said.  

The revenue collector also revealed how it was collecting in foreign currency as the country is now largely using a dual currency comprised of the US dollar as well as the Zimbabwe dollar.

For the quarter under review, net foreign currency collections amounted to US$362,06 million after deducting refunds of US$8,81 million. Using the average rate that prevailed during the time, it suggests at least 33 percent of the revenue was in USD, while the balance of 67 percent was in local dollars.

All revenue heads registered positive growth in nominal terms, according to Zimra.  

The bulk of the revenue amounting to $19,5 billion or 21,30 percent of the total came from companies.

Zimra said the positive performance for companies was mainly driven by a more stable macroeconomic environment ushered in by Government reforms mainly in relation to currency and price stabilisation.  "The fourth Quarterly Payment Date (QPD) at 35 percent formed the bulk of collections under this tax head."

Individuals with $13,7 billion or 15 percent of total came second with Zimra saying salary and cost of living adjustments that some employers offered to their employees to counter rising inflation resulted in the positive performance of this tax head.

"Some businesses also paid bonuses during the month of November 2020 that boosted collections under this tax head. One of the tax heads that performed below expectations was VAT on Local Sales, which seem to have suffered from lower sales and also from some businesses not fully recording their transactions.

"For the better performance of this revenue head, the business community is urged to adhere to the provisions of the 2021 National Budget to have their fiscal devices interfaced to the ZIMRA server.  

"Good corporate citizenry requires that business remit taxes in the currency of trade and offer receipts in the currency that the transaction was made. It is also the customers' rights to demand receipts that reflect the actual payment made."

Also of note is the fall in contribution from the 2 percent tax. The contribution of Intermediated Money Transfer Tax (2 percent tax) to Government coffers continued to fall to just 6,6 percent in Q4 from 10 percent in Q2 2020.  

Monetary policy measures on mobile money transactions instituted in Q2 2020 have continued to impact negatively on the tax head, according to Zimra.