ZIMRA surpasses Q1 revenue target by 5pct

BULAWAYO,– Zimbabwe’s tax agency says gross collections in the first quarter of 2015 surpassed the $850 million target by five percent to $896,6 million, buoyed by better-than-expected revenue from value added tax (VAT), individual tax and excise duty.

ZIMRA surpasses Q1 revenue target by 5pct

According to revenue performance report for the first quarter of 2015 released on Friday, Zimbabwe Revenue Authority (ZIMRA) commissioner-general Gershem Pasi said individual tax and excise duty contributed 25 percent and 21 percent, respectively, to total revenue.

Both VAT on local sales and imports contributed 13 percent each, he said.

Collections under the individual tax were $200.2 million against a target of $192 million. During the same period last year, a total of $193.3 million was realised and this translates to a 4 percent growth in revenue from individual tax, Pasi said.

“The performance of the revenue head can be attributed to improved compliance levels from clients following intensive investigations, audits and follow-ups carried out by the Authority,” Pasi said.

He said Company Tax contributed $71.6 million to total revenue against a target of $81 million. This translates to a negative variance of 12 percent.

He noted that there was a 32 decrease in revenue collections from companies from the $104.7 million that was collected during the same period last year.

“The performance of the revenue head can be attributed to the harsh economic environment which has negatively impacted on companies’ profitability. Companies are facing several challenges which include liquidity constraints, antiquated equipment, insufficient credit lines, high cost of utilities and intermittent power supplies, among many more,” he said.

Pasi said collections under the company tax are expected to improve in the next quarter when 25 percent of the forecasted tax liability will be paid when the second Quarterly Payment Dates (QPDs) becomes due in June.

Carbon tax collections were $8.4 million against a target of $7.6 million, resulting in a positive variance of 11percent. During the same period last year, $8.3 million was collected from carbon tax.

Gross VAT collections amounted to $200.5 million against a target of $157.9 million, resulting in a positive variance of 27 percent. Net collections amounted to $107.8 million against the targeted $157.9 million, which translates to a negative variance of 32 percent.

Pasi said net VAT on Local Sales contributed 13 percent to total revenue and 51 percent to total VAT revenue respectively.

“There has been a 4 percent increase in VAT on local sales revenue from the $103.8 million that was collected during the first quarter of 2014.
The performance of VAT on Local Sales can be attributed to the decline in industrial capacity utilisation to around 36.3% from 39.6% (CZI Manufacturing Survey Report) and low disposable income in the hands of consumers.”

Collections under VAT on Imports contributed 13 percent to total revenue and 49 percent to total VAT revenue respectively. A total of $105.6 million was collected against a target of $96.1 million, resulting in a positive variance of 1o percent. The performance of VAT on imports can be attributed to an increase in the importation of goods which attract VAT, to supplement locally-produced goods.

Customs Duty collections amounted to $78.3 million against a target of $86.0 million, resulting in a negative variance of 9 percent. During the same period last year, $71.2 million was collected and this translates to an increase in revenue by 10 percent.

“The performance of the revenue head was negatively affected by revenue foregone through various duty suppressing instruments. During the quarter under review Customs Duty of $195.9 million was foregone,” Pasi said.

On the excise duty, a total of $165.4 million was collected against a target of $139.0 million, resulting in a positive variance of 19 percent.

Excise Duty on Fuel contributed 78 percent of the total Excise Duty collected. Excise Duty on beer came second with a contribution of 11 percent.

The remainder of the revenue, Pasi said, was realised from tobacco, wines and spirits, second-hand motor vehicles, electric lamps and airtime. He said the performance of the revenue head can be attributed to an increase in the level of petrol imports from 107.8 million litres in the first quarter of 2014 to 122.1 million litres in the first quarter of 2015.

Mining Royalties brought in $19.6 million against a target of $32.5 million, resulting in a negative variance of 40 percent. Pasi said the performance of the revenue head can be attributed to the depressed international prices of minerals, especially of gold and platinum.

Revenue collections from Other Taxes amounted to $46.4 million against a target of $57.9 million, resulting in a negative variance of 20 percent.

Pasi said the negative performance can be attributed to the tobacco levy which did not meet the set targets due to depressed tobacco prices at the beginning of the selling season. This led to low volumes of tobacco being traded at the auction floors, Pasi said. – The Source

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