THE Zimbabwe Revenue Authority (Zimra) says it surpassed its net revenue target by 24,65% to register $23,19 billion in the 2019 fiscal year, largely as a result of inflationary pressures.
BY BUSINESS REPORTER
Zimra had originally targeted net revenue collections of $18,6 billion for 2019. However, the continued devaluation of the Zimbabwe dollar (ZWL) has brought back hyperinflation.
The tax collector’s 2019 annual report says during the fourth quarter, the authority collected net revenue amounting to $11,71 billion against a net revenue target of $7,95 billion which was 47,27% above target.
“On a cumulative annual basis, the authority collected net revenue of $23,19 billion against a target of $18,60 billion for the year ending December 31, 2019 (24,65% above target). The net revenue to GDP (gross domestic product) ratio for the year 2019 stood at 18% against a regional average ratio of 15%. The authority will continue to implement voluntary and enforcement compliance strategies in order to increase this ratio,” Zimra board vice-chairperson Josephine Matambo said.
“The net revenue collected in quarter four of 2019 grew by 651,29% in nominal terms compared to the same period in 2018. In real terms net revenue collections during quarter four of 2019 grew by 11,44% from the same period last year. Generally, all revenue heads recorded growth in nominal terms which is a reflection of both inflationary pressures and the authority’s revenue collection and enforcement strategies.”
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With the Zimdollar continuously devaluing due to insufficient foreign currency and weak market confidence, businesses are raising prices constantly to preserve the value of their goods or services.
This has seen Zimra seemingly benefitting as a result due to the higher margins.
The major tax heads for 2019 were excise duty which contributed 17,75% to net revenue collections, gross VAT sales (16,14%), individual tax (14,8%), and company tax (13,74%).
Matambo said the positive revenue performance was also partly attributed to several revenue enhancement measures that the authority implemented throughout the year.
These measures include a compliance management programme, registering 5 400 new taxpayers, which increased the tax base to 172 497, intensified debt recoveries and special revenue projects strengthening risk-based industries and sector audits on specific tax heads.
“Revenue performance remained positive throughout the year, surpassing revised targets despite the volatile operating environment. With the anticipated GDP growth of 3% in 2020, the authority is optimistic that the annual target of $57,58 billion for 2020 will be surpassed,” Matambo said.