Mthuli Ncube’s 2% tax rakes in $1.6bn in three months

Prof. Mthuli Ncube

FINANCE Minister, Mthuli Ncube’s 2 % Intermediated Mobile Money Tax (IMMT) has raked in $1.6 billion within the first three months of the year.

The details are confirmed in the Zimbabwe Revenue Authority’s 2020 Revenue Performance Report.

“From the target of $1.605 billion a total $1.652 billion was realised from the 2 % tax and measured against the total contributions, the IMMT contributed 12 % towards the total revenue pool,” ZIMRA said.

During the first quarter revenue grew by 613.64% in nominal terms, from $1.94 billion realised in the same period in 2019.

Revenue heads registered growth in nominal terms with major contributors to revenue were Individuals 17%, Excise Duty 16%, Companies and VAT on Local Sales both contributed 14% while VAT on Imports contributed 11%.

The tax authority said the first quarter of 2020 was characterised by exchange rate-based price adjustments, which resulted in most tax payers realising higher sales revenue thereby increasing their tax liabilities.

“During the period under review, some corporates resorted to aligning salaries with the interbank rate to ensure sustenance of their workforce in light of prevailing hostile economic conditions,” the report said.

The companies  revenue head registered positive performance, as most businesses  realised high inflation driven nominal profits while the shortage of hard cash  enhanced the use of electronic and mobile platforms, which provide essential information for audits.

VAT on Local Sales failed to meet the set target after paying $436.81 million worth of refunds.

“The Authority’s efforts to generate more revenue through risk based audits, debt arragement and expedited case management processes is paying dividends as shown by positive performance by most of the revenue heads,” said ZIMRA.

Going forward, the tax authority said an imminent recession due to the COVID-19 pandemic will an impact on revenue collections.

ZIMRA predicted that some of the negative effects of the pandemic will be felt immediately, while others will be long term.

“Combating COVID-19 has inevitably resulted in more financial resources being spent directly towards health services to respond to the disaster and towards cushioning industry, workers, consumers,” added ZIMRA. – Zimbabwe Voice