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Zimra surpasses its first quarter revenue performance by 10,42%

by Staff reporter
01 May 2020 at 07:51hrs | Views
THE Zimbabwe Revenue Authority (Zimra) has surpassed its first quarter revenue performance by 10,42 percent to $13,88 billion underpinned by the implementation of the Government's Transitional Stabilisation Programme.

Zimbabwe adopted a two-year Transitional Stabilisation Programme (TSP) in October 2018, which is anchored on policy reform initiatives meant to stimulate domestic production and exports, rebuilding and transforming the economy to an upper middle income status by 2030.

In a report for the quarter ended March 31, 2020, Zimra board vice chairperson Mrs Josephine Matambo said: "During the first quarter of 2020, Zimra managed to collect cumulative net revenue of $13,88 billion against a target of $12,57 billion (10,42 percent above budget)."

During the quarter under review, revenue grew by 613,64 percent in nominal terms from $1,94 billion realised in the comparable period last year. Mrs Matambo said the authority was intensifying efforts to plug out revenue leakages through closing smuggling loopholes, analysing suppliers and Intermediated Money Transfer Tax (IMTT) returns.

As a result of the above efforts, the revenue authority recovered $168 million while US$1,9 billion was also recovered during the quarter under review.

Mrs Matambo said Zimra was contributing to the improvement of Zimbabwe's ease of doing business index through the facilitation of a "Single Window" project at the border posts and chairing of national thematic area on trading across borders.

She said the major contributors to revenue growth in the first quarter of the year were individuals tax (17 percent), excise duty (16 percent) while companies and Value Added Tax (VAT) on local sales both contributed 11 percent.

The first quarter of the year was characterized by exchange rate-based price adjustments, which resulted in most tax payers realising higher sales revenue thereby increasing their tax liabilities. Mrs Matambo said the individuals revenue head maintained a positive performance as most employers granted their workforce cushioning allowances and cost of living adjustments.

"Some resorted to aligning salaries with the interbank rate to ensure sustainance of their workforce in light of prevailing hostile economic conditions," she said.

The companies revenue head during the period under review also registered a positive performance as most businesses are realising high inflation-driven nominal profits. The shortage of hard cash has enhanced the use of electronic and mobile platforms, which provide essential information for audits, said the tax body. However, net collections for VAT on local sales failed to meet the set target after $436,81 million worth of refunds.

"Its performance was largely affected by falling real incomes, which saw consumers resorting to very basic food stuffs, which are mainly zero-rated," said Mrs Matambo.

On customs duty, excise duty and VAT on imports, she said the performance of the revenue heads largely benefited from the floated exchange rate as duty and VAT amounts were computed using the exchange rate of the day.

"Though excise duty performed poorly (-11 percent) against the target, it accounted for a significant proportion of revenue collection (16 percent)."

In the first quarter, Zimra expedited clearance, and also implemented electronic self-service platform as well as plugging revenue leakages as part of measures to improve the country's ease of doing business index as well as enhancing revenue collection.

To attain the objectives, the authority also focused on the execution of its five-year strategy and maintained positive revenue collection results amid adverse economic challenges including the effects of the Covid-19 global pandemic.

Last year, Zimra board approved a five-year strategic plan, which is modelled in line with the TSP and Vision 2030.

Source - chronicle