Improved mineral royalties spur Zimra

HARARE - Improved performances in mineral royalties stimulated the Zimbabwe Revenue Authority (Zimra) to surpass its $822,6 million third quarter target by 0,1 percent.

Zimbabwe late last year hiked royalties for gold and platinum to seven percent from 4,5 percent and 10 percent from five percent respectively, starting January this year.

In a trading update Zimra board chairperson Stenford Moyo said collections under mineral royalties were 18 percent above target.

“A total of $37,2 million was collected against a target of $31,4 million,” he said.

Net collections for the quarter amounted to $823,4 million against a target of $822,6 million with large portions of the revenue coming from value added tax, individual tax and company tax contributing $271,1 million, $163 million and $117,2 million respectively.

To date, Zimra has collected over $2 billion against a target of $1,8 billion, which would go a long way in improving the government’s liquidity position.

Moyo said individual tax collections totalled $163 million against a target of $162,2 million, resulting in a positive variance of 0,3 percent.

“The revenue head’s performance grew by 8,8 percent compared to the 2011 third quarter collections of $148 million,” he said.

“The positive performance has been due to audits and follow-ups made by the Zimbabwe Revenue Authority as part of its enforcement strategies.

“In addition, intensive information dissemination through various channels has also resulted in improved compliance from clients.”

In the period under review customs duty amounted to $89,4 million against a target of $97,6 million resulting in a negative variance of eight percent.

This represented a 4,6 percent increase from 2011 collections of $85,2 million.

Moyo attributed the decline in customs duty to an improvement in local capacity utilisation.

“The economy is no longer fully reliant on imports implying that the propensity of consumers to import dutiable products has also declined,” he said.

Excise duty contributed $101,8 million to total collections against a target of $103,1 million with duty on fuel and beer contributing 72,1 percent and 20,4 percent respectively.

Other taxes stood at $43,6 million missing a target of $44,7 million by one percent.

Moyo said the performance of this revenue head can be attributed to low liquidity levels that negatively affected the performance of the local bourse, resulting in low collections from capital gains withholding tax.

“The low activity in the mortgage sector has negatively affected the performance of capital gains tax,” he said.

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