The Zimbabwe Revenue Authority (ZIMRA)’s 2019 fourth quarter to December 31, revenue collection totalled $11,7 billion, which is 47 percent ahead of the net target and 651 percent above same period in the prior year, as the tax authority improves on revenue collection.
General inflationary pressures also caused the prices of goods and services to increase, resulting in higher sales values, which drove a positive performance of revenue heads.
This also comes as the authority increased its focus and implementation of the five-year strategy to 2023, which among other objectives seeks to see restoration of fiscal balance through improvements in tax collections, plugging loopholes as well as improve ease of doing business.
These initiatives are also in support of the Transitional Stabilisation Programme (TSP), a roadmap to restoration of confidence in the economy as well as its eventual growth.
During the quarter under review, Zimra registered 5 400 new tax payers. Cumulative registrations stood at 21 333 as at 31 December 2019. This increased the taxpayer base to 172 497.
On a cumulative annual basis, Zimra collected net revenue of $23,19 billion against a target of $18,60 billion for the year ending December 31, 2019 which was 24 percent above target and 358 percent above prior year.
Net revenue to gross domestic product (GDP) ratio for the year 2019 stood at 18 percent against a regional average ratio of 15 percent.
In a performance report for the quarter under review, vice board chairperson Josephine Matambo indicated that among key focus areas, the authority will continue to implement voluntary and enforcement compliance strategies in order to increase this ratio while plugging any revenue leakages.
“The authority is intensifying efforts to plug revenue leakages through closing of smuggling loopholes, fighting and prevention of corruption by Zimra staff members and clients.
“The strategic partnerships between Zimra and the Zimbabwe Anti-Corruption Commission is yielding positive results in terms of prevention and detection of corruption,” she said.
Of the revenue collected, major contributions came from excise duties at 15,63 percent followed by individuals at 15,16 percent while companies and net VAT on locals accounted for 14,25 percent and 12,86 percent respectively.
On an annual basis, these were also among the key contributors as excise duty accounted for $4,1 billion while individuals, companies and VAT on local sales each accounted for slightly above $3 billion.
As inflationary pressures set in during the period under review, companies awarded cushioning allowances and cost of living adjustments which pushed individuals’ contribution.
On the other hand, companies recorded a positive performance during the quarter, which can be attributed to higher nominal profits by some companies coupled with increased use of mobile and electronic modes of payment which have an audit trail.
ZIMRA remains upbeat of surpassing the annual $57,58 billion target for 2020 despite the volatile economic environment as the authority increases focus on enhancing compliance in revenue collections, improving the ease of doing business as well as plugging loopholes to collections.