ZIMBABWE’S distressed industries are struggling to pay taxes, amid widespread company closures and retrenchments owing to the raging coronavirus pandemic that has rattled the global economy.
The International Monetary Fund (IMF) forecasts the global economy to shrink by 3% due to the impact of the coronavirus.
Reeling under a myriad of challenges ranging from prolonged power outages to limited foreign currency, Zimbabwe’s industries are desperately looking for a massive bailout package to keep operations afloat as the world races to find a lasting solution to the pandemic.
Atlas Mara, a local finance and markets institution, has projected that inflation, currently hovering around 500%, will quicken to 1000% by year end as Covid-19 ravages the floundering economy.
Though most countries including neighbouring South Africa have announced gargantuan bailout out packages to cushion their industries, President Emmerson Mnangagwa’s broke government has not yet availed a stimulus package to protect companies, as the devastating disease rages on.
Close to 200 000 people have died so far across the world since coronavirus, also known as Covid-19, broke out in China in December last year.
Zimbabwe has lost four lives from the disease with 28 confirmed cases as of Friday, though experts fear the number could be much higher.
Revenue authorities, due to announce quarterly revenue figures, have highlighted that collections will be lower than the projected target.
Zimbabwe Revenue Authority (Zimra) spokesperson Francis Chimhanda told Standardbusiness that businesses were now struggling to pay taxes, amid ongoing consultations to address the devastating impact of the disease on the fragile economy.
“The lockdown obviously has a negative bearing on revenue,” Chimhanda said.
“This is because the level of economic activity has gone down drastically.
“This affects cash flows, profitability and the ability of businesses to pay taxes.’’
Zimra, he said, was currently engaging with industry players from tourism, banking and manufacturing to come up with a lasting solution.
“We, therefore, are receiving input from institutions like CZI (Confederation of Zimbabwe Industries), ZNCC (Zimbabwe National Chamber of Commerce), hotel and tourism operators, he said.’’
“Their input is helping us come up with a realistic revenue potential, which will obviously back the trend.
“Suffice to say, it is too early to have definitive numbers.’’
Part of the solution to sustain revenue collections, Chimanda said, included coming up with a comprehensive electronic billing system.
“Administrative mitigation of the impact of Covid-19 on revenue collection includes moving towards more electronically or digitally-based tax services which do not require either the staff or taxpayers to physically interface in making or facilitating the transactions,” he said.
With Zimbabwe in the second spell of the lockdown, the southern African country is battling to set its sickly economy on a firm recovery and growth trajectory. – The Standard