The Zimbabwe Revenue Authority (Zimra) posted a 10.42 percent gain in revenue targets for first quarter to 31 March 2020 thanks to an intensive revenue recovery exercise, 263Chat Business can reveal.
Zimbabwe losses nearly USD 1 billion on average annually in potential tax through weak tax systems and porous borders leading to rampant smuggling of goods, the authority has previously reported.
During the first three months, Zimra collected ZWL 13.88 billion against anticipated ZWL 12.57 billion in revenue, marking a 10.42 percent excess.
Notably, this was aided by the consolidation of revenue heads through recovery of leakages.
“The authority is intensifying efforts to plug revenue leakages through closing of smuggling loopholes, analysing suppliers and the IMTT returns,” Zimra board vice chair, Josephine Matambo said.
“The Authority worked on risk-based audits and sector based audit projects to plug revenue leakages during the quarter. The project includes anti-smuggling, verification of suppliers’ compliance and the IMTT,” she added.
The Authority managed to recover a total of ZWL 168. 056 million and USD 1.910 million in leakages.
During the period, Zimra recovered ZWL 49. 351 million and USD 1.823 million from smuggling activities.
From suppliers, Zimra intensified risk-based audits that led to the recovery of ZWL 69.793 million and USD 84.892.
Through verifications of the Intermediary Money Transfer Tax (IMTT) the Authority recovered ZWL 48.912 million.
The development has been widely applauded for preserving the little resources at hand at a time government coffers are set for a huge strain in months ahead due to the effects of the Covid-19 pandemic.
According to Zimra, individual tax topped the revenue heads at 17 percent of total contributions, followed by Excise duty (16 percent), Companies and VAT local sales (14 percent each), IMTT (12 percent), VAT on imports (11 percent), customs duty (8 percent), mining royalties (2 percent) and other taxes such as carbon tax and DFIR and other non tax revenue.
However, the end of Q1 was marked by the beginning of the Covid-19 lockdown which started on April 1 and this has spelt disaster for the economy.
Already, there is an anticipation of a steep decline in revenue for the tax collector in the second quarter as companies are likely to either close or default on payments.
Employment figures are also expected to tumble, and this could affect Zimra’ s biggest cash cow, the corporate tax.
“Some of the negative impacts of the Covid-19 would be felt immediately while some will be long-term,” Matambo said.
Zimbabwe’s economy is expected to shrink by at least 9 percent this year, the Zimbabwe National Chamber of Commerce has said.
