News / National
Zimra revenue collection surpasses target
29 Aug 2023 at 02:04hrs | Views
A TOTAL of $4,43 trillion in revenue was collected against a target of $3,49 trillion in the first half of the year with positive growth recorded on value-added tax on imports, customs duty, excise duty and tobacco levy with the Zimbabwe Revenue Authority (Zimra) expressing confidence that revenue collection for the third quarter of the year will exceed six percent of gross domestic product.
In the latest revenue performance report for the first half ended 30 June 2023, Zimra board chairman, Mr Anthony Mandiwanza noted that in the period under review, the operating environment was depressed for most months, characterised by high inflation and a depreciating local currency.
He said the local unit continued to weaken against the US dollar with the exchange rate opening the year at US$1: ZWL$684,33 and closing at US$1: ZW$5 739,80.
Added to that, year-on-year inflation worsened by 74,24 percentage points from 101,51 percent in January 2023 to 175,75 percent at the close of the period under review.
That led to the Government introducing a string of monetary and fiscal measures aimed at stabilizing the economy in May and June.
"The interventions brought some stability towards the end of the period under review. Power supply improved during the first half of the year, impacting positively on production. The tobacco selling season which opened in March 2023 contributed to foreign currency supply in the economy and resulted in less pressure on the local currency.
"Furthermore, the reduction in interest rates from 200 percent to 140 percent is expected to spur production and economic growth," he said.
Detailing revenue performances, Mr Mandiwanza said the revenue authority remains resolute to its mandate to support national development through revenue mobilisation.
"The Authority will remain flexible enough to quickly adapt to policy changes being introduced to restore normalcy in the economy.
"As some of Zimra's strategic projects are nearing completion, we are confident that internal processes will be more robust and service provision will improve significantly in the near future, increasing both revenue collection in local currency and the multiple currencies used in the economy.
"To this effect, it is expected that revenue collection for the third quarter of the year will exceed six percent of GDP."
He indicated that nominal net revenue collections were $4,43 trillion, translating to nominal and real growth of 801,58 percent and 1,63 percent respectively.
"Foreign currency revenue collections amounted to US$1,32 billion against a target of US$1,37 billion, leading to a negative variance of 3,72 percent. Positive growth was registered in all revenue heads in nominal terms. In real terms, revenue heads that recorded positive growth were VAT on imports, customs duty, excise duty, other indirect taxes, tobacco levy and carbon tax."
Revenue on individuals amounted to $804 billion from a target of $577 billion surpassing the target by 39,32 percent.
"In real terms, revenue from individuals declined by 0,89 percent when compared to H1 2022. The nominal performance was mainly attributable to the increase of salary payments in line with inflationary pressures that were experienced during the period under review," he said.
"Furthermore, some employers adjusted salaries and wages in line with prevailing cost of living."
Company collections were $604,1 billion from a target of $472 billion representing 27,93 percent above the target for the first half of 2023.
In real terms, Mr Mandiwanza said revenue collections went down by 6,02 percent from H1 2022 collections. Net revenue collections recorded a marginal decline of 0,12 percent in real terms showing diminishing levels of consumption in the economy.
Revenue targets for customs and VAT on Imports were surpassed by 13, 00 percent and 26,80 percent, respectively while excise duty surpassed the target by 21,14 percent and real revenue grew by 12,54 percent.
Mr Mandiwanza said in the period under review, exports amounting to $5,58 trillion were processed while imports worth $6,67 trillion were brought into the country
Major exports during the quarter were minerals and tobacco while imports were dominated by diesel, petrol and motor vehicles.
"Industry continues to benefit from duty and VAT suppressing instruments on importation, as shown by revenue foregone through trade taxes amounting to $703,04 billion and US$953,04 million during the first half of 2023."
In the latest revenue performance report for the first half ended 30 June 2023, Zimra board chairman, Mr Anthony Mandiwanza noted that in the period under review, the operating environment was depressed for most months, characterised by high inflation and a depreciating local currency.
He said the local unit continued to weaken against the US dollar with the exchange rate opening the year at US$1: ZWL$684,33 and closing at US$1: ZW$5 739,80.
Added to that, year-on-year inflation worsened by 74,24 percentage points from 101,51 percent in January 2023 to 175,75 percent at the close of the period under review.
That led to the Government introducing a string of monetary and fiscal measures aimed at stabilizing the economy in May and June.
"The interventions brought some stability towards the end of the period under review. Power supply improved during the first half of the year, impacting positively on production. The tobacco selling season which opened in March 2023 contributed to foreign currency supply in the economy and resulted in less pressure on the local currency.
"Furthermore, the reduction in interest rates from 200 percent to 140 percent is expected to spur production and economic growth," he said.
Detailing revenue performances, Mr Mandiwanza said the revenue authority remains resolute to its mandate to support national development through revenue mobilisation.
"The Authority will remain flexible enough to quickly adapt to policy changes being introduced to restore normalcy in the economy.
"As some of Zimra's strategic projects are nearing completion, we are confident that internal processes will be more robust and service provision will improve significantly in the near future, increasing both revenue collection in local currency and the multiple currencies used in the economy.
"To this effect, it is expected that revenue collection for the third quarter of the year will exceed six percent of GDP."
He indicated that nominal net revenue collections were $4,43 trillion, translating to nominal and real growth of 801,58 percent and 1,63 percent respectively.
"Foreign currency revenue collections amounted to US$1,32 billion against a target of US$1,37 billion, leading to a negative variance of 3,72 percent. Positive growth was registered in all revenue heads in nominal terms. In real terms, revenue heads that recorded positive growth were VAT on imports, customs duty, excise duty, other indirect taxes, tobacco levy and carbon tax."
Revenue on individuals amounted to $804 billion from a target of $577 billion surpassing the target by 39,32 percent.
"In real terms, revenue from individuals declined by 0,89 percent when compared to H1 2022. The nominal performance was mainly attributable to the increase of salary payments in line with inflationary pressures that were experienced during the period under review," he said.
"Furthermore, some employers adjusted salaries and wages in line with prevailing cost of living."
Company collections were $604,1 billion from a target of $472 billion representing 27,93 percent above the target for the first half of 2023.
In real terms, Mr Mandiwanza said revenue collections went down by 6,02 percent from H1 2022 collections. Net revenue collections recorded a marginal decline of 0,12 percent in real terms showing diminishing levels of consumption in the economy.
Revenue targets for customs and VAT on Imports were surpassed by 13, 00 percent and 26,80 percent, respectively while excise duty surpassed the target by 21,14 percent and real revenue grew by 12,54 percent.
Mr Mandiwanza said in the period under review, exports amounting to $5,58 trillion were processed while imports worth $6,67 trillion were brought into the country
Major exports during the quarter were minerals and tobacco while imports were dominated by diesel, petrol and motor vehicles.
"Industry continues to benefit from duty and VAT suppressing instruments on importation, as shown by revenue foregone through trade taxes amounting to $703,04 billion and US$953,04 million during the first half of 2023."
Source - The Chronicle
