THE Zimbabwe Revenue Authority (Zimra) which has become governmentâ€™s main source of funding as external support remains elusive surpassed its revenue collection target for the second quarter after amassing US$209 million to take total collections in the half-year to US$286 million.
Zimra had targeted to raise US$194 million during the second quarter of the year, but a strong performance in value added tax (VAT), with a 58% positive variance, and US$61 million contribution from customs duty ensured the target was surpassed.
â€œWe anticipate that the third and fourth quarters will see the country economically improving and hence more income for employees will be realised,â€ Zimra chairman Dr Gibson Mandishona said.
Collections in the second quarter stood way above the US$75 million collected in the first quarter of the year.
VAT totalled US$87 million against a revenue target of US$55 million largely as a result of rising capacity utilisation by firms, especially in May and June.
The revenue collection authority said the fact that VAT on local sales surpassed that on imports was evidence that the economy was picking up quite well.
In addition, Zimra said the rise in pay as you earn resulted in an increase in disposable income and consequently more VAT revenue inflows.
â€œAlthough some challenges are still prevailing in the economy, the remaining half of 2009 promises to be an improvement on the first half, especially if the inclusive government succeeds in implementing its recovery programmes,â€ Mandishona said.
Customs duty contributed the second biggest chunk to the total second quarter revenue despite a US$294 000 negative variance, but was expected to do much better as activity in the economy gathered momentum.
Individual tax weighed in with the third biggest contribution to second quarter collections at US$36 million, 28% above expected levels while company tax and excise duty each contributed three percent.
Both company tax and excise duty failed to match collection targets falling short of expected levels by 76% and 60% respectively. VAT constituted the largest chunk to total collections for the half-year to June, accounting for 40% of the US$286 million collected in the period.
Customs duty maintained second spot in contributions to second quarter revenue at 32% while the individual tax head came third with a 16% contribution to revenues collected in the first half of the year.