Zimbabwe Revenue Authority (ZIMRA) gross collections for the first half of the year ended 30 June 2018 amounted to US$2.41 billion surpassing the previous year where it got US$1.79 billion.
The gross collections surpassed last year’s collections by 35.94% and also above the target of US$ 2.10 billion by 15.09%.
“Net collections rose by 35.94% in 2018 from the US$1.70 billion that was collected in 2017, owing to an improvement in the operating environment for business,”ZIMRA half year report says.
“Major contributors to revenue were Excise Duty (19%), Net VAT on Local Sales (18%) and Individuals (18%).”
VAT (Value Added Tax) is an indirect tax on consumption, charged on the supply of taxable goods and services according to ZIMRA.
Individual taxes, which ZIMRA collected amounted to over US$ 416 million below the target of over US $ 419 million.
“While the rest of the tax heads performed above expectations, three revenue heads, namely: Individuals, Net VAT on Local Sales as well as Other Indirect Taxes performed below expectations,” ZIMRA says.
“The performance of the Net VAT on Local Sales is disturbing not only because the variance is so huge, but also because the revenue head had picked up remarkably following the introduction of the 10% withholding tax.”
“ZIMRA has strengthened controls in the payment of VAT refunds to curb fraudulent payments,” ZIMRA continues. “In the past the Authority was refunding VAT which had not yet been collected and will continue audit of refunds and enforcing payments of withholding tax, especially for non-compliant or unregistered taxpayers.”
ZIMRA attributes the positive performance to its various revenue enhancement projects, increased use of automation and a resolute stance against corruption.
“The current inflationary environment and the widespread use of plastic and mobile money transactions also enhanced revenue collections in nominal terms, especially for revenue heads such as VAT,” ZIMRA says.
