Monday, 27 August 2018

BOOZE BOOSTS REVENUE COLLECTIONS


THE Zimbabwe Revenue Authority (Zimra) surpassed its gross revenue collection target by 20,80% in July, according to a statement by the tax collector, which also showed that performance was buttressed by excise duty.

A total of $406,13 million was receipted against a target of $336,20 million.

Compared to the same period last year, revenue collections grew 34,05% in gross terms and by 10,8% to $33,55 million in net terms when adjusted for refunds on deductions.

“Gross collections of US$406,13 million exceeded the target of US$336,20 million by 20,80%,” Zimra head of corporate communications Taungana Ndoro said in a statement on Thursday.

“On the other hand, net collections amounted to $372.58 million after deducting refunds amounting to $33,55 million. This translates to a positive variance of 10,82%. Compared to the same period in 2017 where $286,49 million was realized, revenue collections grew by 30,05%.”

It is understood taxpayers took advantage of a tax amnesty granted by the revenue authority early in the year to settle their obligations without paying penalties and interest.

Revenue performance was driven by excise duty, followed by individual income tax, corporate tax, VAT on local sales, VAT on customs duty and customs duty.

Although the revenue head surpassed the by just about 1%, excise duty raised the bulk of the revenue for Zimra, $69,50 million instead of $68,87 million.

Excise revenue increased by 22.60% in July in comparison with the US$56,73 million collected during the same period last year.

Ndoro in the statement attributed strong excise duty performance to charges on fuel, airtime and beer, which contributed 69,28%, 12,77% and 10.90%, respectively.

Excise on beer and airtime was buoyed by increased consumption during the World Cup Soccer tournament, which saw consumers spending more as they watched the games. The increased consumption may also be attributed to the pre-election activities.

The volume of fuel imports increased in July this year in comparison to the same period last year. Petrol imports increased by 26,73% to 44,54 million litres in July 2018 from 34,15 million litres in July 2017. Similarly, diesel imports increased by 28,63% to 91,48 million litres from 71,12 million litres.

Compared to the previous month, petrol imports decreased by 27,90% to 44,54 million litres in July 2018 from 61,78 million litres in June 2018. Similarly, diesel imports decreased by 19,74% to 91,48 million litres in July 2018 from 113,98 million litres in June 2018.

Zimra attributed the negative performance of excise on fuel to the decline in fuel imports because of shortage of foreign currency.

Collections from companies surpassed the set target of US$15.80 million by 239,50%. Further, the authority recorded a growth in collections of 315,89% from US$12,90 million that was realised in the same period last year.

“All revenue heads surpassed set targets except for individuals, VAT on local sales, CGT & CGT Withholding, DFIR and tobacco levy, which recorded negative variances of 11,36%, 28.97%, 11,19%, 44,29% and 12.40% respectively,” according to the statement.

“The huge variance on VAT on local sales is attributed to VAT refunds that constituted 37,17% of VAT gross collections.”

VAT on local sales fell from $89,87 million to $56,47 million, about 28,97% below the target of $79,50 million, following the deduction of current refunds, which amounted to $33,40 million.

Compared to the same period in 2017, net VAT on local sales fell 6,20% in July from $60,20 million collected in the same period last year.

Collections from mining royalties amounted to $8.64 million, which translates to 0,51% above the set target of $8,60 million. Revenue collections grew by 67,62% from $5,16 million collected in July 2017. The positive performance was mainly due to improved mineral prices particularly for gold. Newsday

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