The Zimbabwe Revenue Authority (Zimra) has surpassed its half year revenue collection target by 23 percent after raking in $5,27 billion driven by a number of interventions including the two percent intermediated money transfer tax.
The two percent tax was introduced by Finance and Economic Development Minister Professor Mthuli Ncube late last year to expand Government’s capacity for capital funding and retooling of the manufacturing sector.
Zimra board chairperson Dr Callisto Jokonya announced yesterday that revenue collections maintained a “robust positive trajectory”, with collections surpassing targets both on gross and net positions.
“Revenue performance for the first half of 2019 exceeded the set target on both gross and net positions,” said Dr Jokonya.
“Gross collections for the first half (H1) of 2019 were $5,27 billion against the targeted $4,3 billion, thereby surpassing the set target by 22,75 percent.
“After deducting refunds of $211,52 million for the first half, net collections of $5,06 billion surpassed target of $4,30 billion by 17,83 percent.”
Gross revenues generated in the first half of this year were 118,71 percent from compared to $2,41 billion generated in the same period last year.
Similarly, net collections recorded a growth of 118, 92 percent from $2,31 billion collected in the first half of last year.
Said Dr Jokonya: “Positive performance is attributed to the significant contributions from excise duty, intermediated money transfer tax (IMTT), individuals tax, value added tax and company tax.
“This has been bolstered by the Authority’s revenue enhancement initiatives and strategies aimed at promoting compliance.”
Dr Jokonya said one of the game-changing projects pursued by the new Zimra board focused on pay as you earn in foreign currency, which has had significant impact especially during the month of May when it was introduced.
Going forward, the Zimra board is confident that the re-introduction of the Zimbabwe dollar through Statutory Instrument (SI) 142 of 2019, also known as Reserve Bank of Zimbabwe (Legal Tender) Regulations, will further boost calculations through simplifying calculations.
“Monetary policy transition from multiple currency regime to the use of Zimbabwe dollar as a local currency introduced through SI 142 of 2019 gives hope for more revenue flows.
“The move will also enable simple tax calculations and reporting, which can enhance compliance,” said Dr Jokonya.
He added that the Authority has “gathered momentum” in the implementation of the five-year strategy (2019-2023) aimed at maximising revenue collection, increase compliance, strengthen institutional image, enhance trade facilitation and protection on civil society.
Dr Jokonya said the five-year strategy was aligned to Transitional Stabilisation Programme (TSP) pillars of improving the ease of doing business, restoration of fiscal balance and plugging revenue leakages.
He said they expect to surpass the third quarter revenue target through implementing various revenue enhancing measures which include verification of VAT input tax for traders in forex and VAT withholding tax, and projects focusing on auditing motor dealers and cement traders.