FINANCE and Economic Development Minister, Professor Mthuli Ncube, has directed the Zimbabwe Revenue Authority (Zimra) to swiftly address policy implementation gaps as he called for full-scale fiscalisation to tackle tax avoidance and harness more revenue for national development.
Domestic resource mobilisation is critical for sustainable economic growth and Zimbabwe possesses maximum potential to collect more revenues, in particular, considering the untapped potential concealed in various policies that still require full implementation, said the minister.
In a speech read on his behalf by Treasury secretary, Mr George Guvamatanga during the 4th virtual Zimra annual general meeting yesterday, Prof Ncube said the tax authority should “swiftly address policy implementation bottlenecks”.
He noted, in particular, the need to iron out gaps in the fiscalisation programme and the attendant VAT (value added tax) refunds mechanism.
Fiscalisation refers to a system of configuring fiscal devices to enable them to record sales and tax information by businesses on the read-only fiscal server directly linked to the tax regulator.
Backed by a legal instrument, fiscalisation aims to prevent tax fraud associated with manual processes by ensuring that VAT transactions, for instance, are reported and paid correctly to the authorities.
Despite the dampening Covid-19 pandemic on the economy, Minister Ncube said revenue performance has exhibited commendable resilience, riding mainly on technology-driven approaches.
“It, thus, becomes critical for the revenue authority to enhance the information technology platform, which is key in electronically connecting operators, agents and general taxpayers to facilitate seamless and uninterrupted connectivity, thereby guaranteeing prompt payment of taxes, regardless of geographical location of taxpayers,” said Prof Ncube.
“I’ve already alluded to the need to harness revenue that remains concealed in operators that have not yet fully embraced the fiscalisation programme.
“I note that the majority of operators have not fully fiscalised their operations, including, in particular, ensuring that fiscalised devises are linked to the Zimra server.”
The minister said Zimra must work harder to realise collections of above set targets and ensure that all qualifying registered operators were fully fiscalised, with a view of securing VAT revenue.
The revenue collector met its annual net collection target for the 2020 period after recording an above target collection of $171,9 billion. The authority managed to collect annual net revenue of $181,96 billion against the target of $171,9 billion representing 5,85 percent above target. This result presented a real growth of 74,93 percent compared to 2019 collections after adjusting for inflation.
“I challenge Zimra to work towards exhausting the revenue collection potential beyond set targets, cognisant of the fact that such targets are set in line with the tax administration’s capacity to administer current policies,” he said.
Meanwhile, Prof Ncube has commended the tax body for continued efforts aimed at plugging revenue leakages, eradicating corruption, improving service delivery and harnessing technology.
He said strengthening the zero-tolerance stance to corruption must be enhanced as well as weeding out other rent-seeking behaviour, which have the potential to derail Government development priorities enshrined under the National Development Strategy (NDS1:2021-2025).
Prof Ncube also said strict implementation of the Electronic Cargo Tracking System, as well as full automation of Zimra systems will be key in eliminating transit fraud and other revenue leakages associated with physical interface with taxpayers.
Zimra has said it remains focused on the drive to widen the tax base through registration of new taxpayers, which resulted in an additional 21, 623 new clients in 2020. These new taxpayers contributed $558,2 million against a target of $218,7 million.
Foreign currency collections for 2020 amounted to USD$787,85 million, the substantial collections realised after the RBZ authorised local trade using free funds by individuals and corporates through Statutory Instrument 85 of 2020 to mitigate the effects of the Covid-19 pandemic. – Chronicle