BY BUSINESS REPORTER THE Zimbabwe Revenue Authority (Zimra) surpassed by 36,84% to $491,49 billion its target for cumulative net revenue collections for the first half of the year, owing to intensified compliance strategies.
The cumulative net revenue collections were up from an initial target of $359,16 billion for the first half and rose about 84% from $195,17 billion at the end of the comparative 2021 period.
In its newly released annual report, Zimra said due to this performance it expected to surpass its net revenue collection target of $809,4 billion by year end.
“The authority started the year 2022 on a positive note with the first half (H1: 01 January to 30 June 2022) cumulative net revenue collections of $491,49 billion against a target of $359,16 billion (36,84% above target). The 2022 annual revenue target of $809,40 billion is likely to be reviewed upwards in the second half of 2022,” Zimra said.
“Going forward, the authority expects to collect net revenue in excess of $951 billion, supported by intensified implementation of various compliance strategies to ensure timely and accurate tax remittances from different taxpayer segments. Real revenue growth is anticipated to exceed 10% supported by the improving manufacturing sector capacity utilisation and the anticipated mining sector growth in which the industry is expected to meet the US$12 billion-dollar target by 2023.”
Zimra added that infrastructure developments, particularly, the completion of part of the Beitbridge- Chirundu Highway that links Zimbabwe to the North South Corridor is expected to play a huge role.
“Inflation and exchange rate depreciation will also result in higher nominal revenue growth,” Zimra said.
As a result of the depreciating local currency, from $108,66 at the beginning of the period under review to $370,96 at the end of June, against the United States dollar, Zimra is collecting higher taxes.
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This is despite industry reeling from increased costs including the world record bank interest rate hike of 200%, from an initial 80%, implemented last month.
Based on Zimra’s first quarter report for the year, value-added and company tax heads are the biggest contributors to the taxman’s collections.
“The authority’s five-year strategy (NDS-1) (2021-2025) is aligned to the government’s National Development Strategy 1, which also runs for the same period. The strategy mainly supports the economic growth and stability national priority pillar under NDS-1,” Zimra chairman Anthony Mandiwanza said.
“In direct support of the government’s efforts to grow and stabilise the economy, (in 2021) Zimra collected net revenue of $463,57 billion against a target of $387,40 billion (19,66% above target). Revenue grew by 154,77% in nominal terms compared to 2020. However, revenue grew by 4,73% in real terms from 2020 (after adjustment for inflation) against an estimated real gross domestic product (GDP) growth of 5,8% in 2021. The net revenue to GDP ratio grew from 15,73% in 2020 to 19,56% in 2021.”
The authority’s overall strategy implementation success rate improved from 60,6% in 2020 to 72,3% in 2021.
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