The Zimbabwe Revenue Authority (ZIMRA) says it surpassed its first quarter revenue target by eight percent due to improved local industrial capacity utilization and upward review of salaries of workers by some companies.
ZIMRA chairman Stanford Moyo said in a statement, total gross revenue collections stood at $774 million against a target of $714 million.
Moyo said the largest portion of the revenue was realized from Value Added Tax (VAT) which contributed 38 percent of the total collections followed by individual tax.
VAT contributed $292.7 million while individual tax accounted for 19 percent of the total revenue and total collections from Customs duty amounted to $88.9 million.
He said indications are that industrial capacity utilization currently estimated at 57 percent boosted individual incomes and the purchasing power of Zimbabweans resulting in remarkable VAT and individual tax collections.
“The outstanding performance of this revenue head (VAT) can be attributed to improved local industrial capacity utilization which enhanced performance of VAT on local sales,” said Moyo.
Individual tax collections were $145.5 million against a target of $160.2 million, resulting in a negative variance of 10 percent.
He said this can be attributed to the tax-free threshold which was reviewed upwards from $225 to $250 per month in the 2012 by Finance Minister Tendai Biti. “The upward trend had the effect of increasing disposable income for employees while reducing the taxable portion.”
Moyo said the quarterly Customs Duty revenue target was missed because the local industry has experienced significant improvements in terms of capacity utilization resulting in the economy dumping most imports.
He further said by the end of the quarter, about 30 million kilograms of tobacco had been auctioned at an average price of $3.70 per kilogram and this translated to $135 million worth of tobacco sales.
Economic commentator Masimba Kuchera of the Zimbabwe Coalition on Debt and Development said the significant tax collections are being dampened by diminishing diamond revenues