Individuals overtake companies as top contributors to govt revenue
Individual taxpayers have overtaken companies to become top contributors to government revenue, a recent report by the Zimbabwe Revenue Authority (ZIMRA) has shown.
In a revenue performance report for the third quarter ended 30 September 2020 published this week, ZIMRA board vice chairperson, Josephine Matambo, said top contributors to net revenue collections for the quarter were individuals at 15.26%.
Companies at 14.63% followed individuals.
Excise Duty was at 14.17%, VAT on Local Sales at 13.24% and VAT on Imports at 13.08%.
On companies Matambo said the positive performance during the quarter was mainly driven by the relaxation of lockdown conditions which resulted in more businesses resuming operations, restrictions of imports in line with Covid-19 measures which led to an increased demand for locally produced goods, as well as ongoing compliance enforcement projects which the authority is implementing.
“The performance of the revenue head (excise duty) is attributed to increased consumption of excisable goods as well as the exchange rate factor in the calculation of duty on fuel, especially in line with the auction rate adjustment,” she said.
Matambo said the revenue derived from VAT on local sales registered a positive performance in both gross and net terms due to increased operations by businesses, enforcement of the use of fiscal devices by registered operators which leave an audit trail of transactions and compliance checks that are being conducted by ZIMRA.
“The revenue head has benefited from the import substitution efforts being made in order to boost local manufacturing,” she said.
The positive performance of VAT on imports, Matambo said, was mainly attributed to the diligence displayed by ZIMRA staff when clearing consignments and the prevailing exchange rates used in the calculation of taxes on imports.
“The Intermediated Money Transfer Tax (2%) lost its momentum, missing the target of
ZW$5,860,000,000 by ZW$1,947,176,596.12 (32.23%) and contributing only 6.86% to total revenue for the quarter,” she bemoaned.
“This was partly due to the monetary policy interventions introduced to harness the local currency depreciation that was threatening economic stability.”