Revenue inflows improved significantly towards the end of last year with the Zimbabwe Revenue Authority (ZIMRA) surpassing the treasury’s annual target by 11 percent as the economy strengthened.
In a statement, ZIMRA board chairman Sternford Moyo said cumulative gross collections for the year amounted to US$2.8 billion against a target of US$2.5 billion.
Moyo said value added tax contributed the bulk of the revenues followed by individual tax, customs duty, company tax and excise duty.
Value added tax amounted to US$1.1 billion against a target of US$990 million. “This performance can be attributed to improved information dissemination, audits and follow ups done by the authority which have improved compliance levels,” he said.
He said capacity utilization for the local industry has been gradually improving resulting in the enhanced performance of VAT on local sales.
He said the increase in individual tax collections were driven by companies that increased salaries and awarded bonuses to employees and revived operations in the last quarter of last year.
“The rise in capacity utilization led some companies into hiring additional employees while others rehired some of their former workers who had been fired,” said Moyo.
In terms of customs duty, a total of US$334 million was collected against a target of US$325 million. The anticipated ban on importation of second-hand motor vehicles older than five years, he said, accelerated collections as members of the public rushed to import them before the deadline.
Companies contributed 11 percent of the total annual revenue despite shortages of lines of credit. Collections amounted to US$297 million against a target of US$270 million.
Excise duty collections of US$306.6 million were made against a target of US$236.5 million. Fuel had the highest contribution of 63 percent in this category followed by beer. The capacity utilization of companies that produce excisable products significantly improved from 85 percent in 2010 to 93 percent last year.
“As a result of this upward trend revenue collection from excisable goods improved in 2011,” said Moyo.
Other improved collections were recorded in mining royalties and presumptive tax.
Economic commentator Masimba Kuchera said government should monitor company revenue collections in order to boost state coffers as the economy is set to grow by 9.4 percent this year