Zimra targets $172bn after forecast-busting show
ZIMBABWE’S revenue collector said on Monday it was projecting to collect $172 billion this year following a third quarter forecast-busting show that was underpinned by the resumption of operations by businesses across sectors.
Provisional forecasts had placed this year’s target at about half of that figure.
The Zimbabwe Revenue Authority (Zimra) saw its revenue reached $57 billion during the third quarter, a staggering 27,16% rise above its $44,83 billion target.
This is according to an update by the authority’s chairperson Josephine Matambo ( pictured).
The authority collected $6,42 billion during the same period last year.
This represents a 788,16% rise in State revenue.
The strong performance was boosted by a mix of strategies that included limiting tax incentives during the mid-term budget review and the release of drones to monitor remote border locations in order to limit revenue leakages.
Following President Emmerson Mnangagwa’s lockdown order in March to minimise the spread of COVID-19, businesses began to reopen in a measured approach from June.
Matambo said this gave Zimra the impetus to collect more revenue.
She said the momentum started building up in the final months of the year as more firms returned to operations and cross-border trade began to flourish following the reopening of the key Beitbridge inland port.
Previously, the Beitbridge Border Post had been opened only for commercial transport operators shipping goods up north from South African ports.
“The growth is expected to come from increased productivity with the opening up of more business sectors in the economy,” Matambo said. “In addition, the government’s strategy to target lowhanging fruits in various subsectors of the manufacturing industry is expected to attract the muchneeded investment for domestic production. South Africa has opened its borders and crossborder trade is, therefore, expected to increase, thereby feeding into higher collections in import duties. The weather forecasts are projecting good rains in the coming farming season; this boosts economic activity in all sectors as value chains can then be easily promoted. The monetary policy interventions that were done during this period inflated the amounts to be collected resulting in a corresponding positive impact to the revenue,” she said.
All revenue heads registered positive growth in nominal terms, the Zimra boss said in the update.
She said major contributors to net revenue collections were individuals, who brought in 15,26% of total revenue, followed by companies with 14,63% and excise duty at 14,17%.
Value-added tax (VAT) on local sales contributed 13,24%, while VAT on imports added 13,08% to total revenue collected.
Intermediated Money Transfer Tax lost its momentum, missing the target of $5,86 billion by 32,23% and contributing only 6,86% to total revenue for the quarter.
“This was partly due to the monetary policy interventions introduced to harness the local currency depreciation that was threatening economic stability,” she said.
Other taxes such as mining royalties, withholding taxes missed the quarterly targets due to operational challenges in the energy sector.
“Momentum in revenue collection is expected to be gained in the last quarter of the year with the revenue collection target for the year having been increased to ZWD172 billion. The growth is expected to come from increased productivity with the opening up of more business sectors in the economy. In addition, the government’s strategy to target low-hanging fruits in various sub-sectors of the manufacturing industry is expected to attract the much-needed investment for domestic production. South Africa has opened its borders and cross-border trade is, therefore, expected to increase, thereby feeding into higher collections in import duties. The weather forecasts are projecting good rains in the coming farming season; this boosts economic activity in all sectors as value chains can then be easily promoted,” Matambo said.