MASSIVE company closures and scaling down of operations saw the country’s tax collector raising US$878 million in revenue for the third quarter ending September against a target of US$964 million, official figures have shown.
Zimbabwe Revenue Authority (Zimra) said an underperforming economy characterised by low foreign direct investment inflows and liquidity constraints has affected revenue collection.
“The economic environment remained harsh for the third quarter of 2015. The liquidity situation has not changed despite the current initiatives to solve it,” Zimra chairman Willia Bonyongwe said.
“A lot of companies closed down or are in further distress as a result of the situation. This has had an adverse impact on margins and employment levels in Zimbabwe. The depressed commodity prices globally also exacerbated the challenges to business. All this impacted negatively on the various revenue heads.”
Value added tax on local sales, the country’s major source of revenue stood at US$136 million against a target of US$161 million. Zimra collected US$85 million in corporate tax against a target of US$124 million, reflecting underperformance of companies.
“A total of US$17,27 million was collected under this revenue which is 44,38% of the targeted US$38,93 million. The revenue head recorded a 47,84% decline in revenue collections from the US$33,12 million that was realised during the same period last year,” Bonyongwe said.
“The performance of the revenue head can be attributed to the depressed international mineral prices and lower sales than anticipated as a result of non-production and reduced production by some companies. The contribution of the mining sector is being looked into through an ongoing fiscal reform which should address the need for revenue and the need to attract revenue in the sector.”-Staff Writer