Tough times ahead, Zimra warns

HARARE - Tax collector, Zimbabwe Revenue Authority (Zimra), has warned of a tough economic environment ahead as government faces shrinking revenue inflows.

Gershom Pasi, the authority’s commissioner-general, told Parliament yesterday that despite surpassing the 2014 first quarter revenue target — yet to be disclosed — by two percent, Zimra is likely to miss tax income targets for the year.

“We are headed for serious shrinkage of revenue unless something is done soon to increase revenue in the country,” the taxman said. “It’s a miracle that we have surpassed our first quarter target... considering the current state of the economy. Things are not well out there,” he said, adding that government must urgently act to stimulate local production.

Last year, Zimra collected a total revenue of $3,4 billion, six percent short of a $3,6 billion target. Government registered a budget deficit of $16,8 million in February compared to a surplus of $17,8 million in January, as revenue collections declined, further reflecting the economic slow-down.

February revenues stood at $248 million against a target of $273,3 million, resulting in a negative variance of $25,3 million. The month’s expenditures amounted to $264,8 million, 58 percent of which went to government employment costs.

Value added tax contributed to the bulk of tax revenue at 33 percent, pay-as-you-earn 24 percent, excise duty 14 percent while non-tax revenue remained subdued at four percent. This comes as Zimbabwe’s economy, expected to grow by 6,1 percent this year, is showing signs of stress characterised by deflation, lack of aggregate demand and a trade deficit that has widened to $3,5 billion.

The country — still recovering from a decade-long economic recession — currently relies on tax collections to fund its national budget, with the public service wage bill absorbing 73 percent of all government spending, leaving just 11 percent for capital investment and 16 percent for non-wage recurrent expenditure.

Comments (17)

dear sir there is a lot of money we have been talking about and the thieves holding onto. in fact it includes you also mr pasi. tax these guys and you will discover that your revenue collection may rise even by 5 to 10%. zimbabweans are easy to feed.they are not a complaining people so why do you allow these thieves to steal from them. do you want to tax the already over taxed lowly paid man. no please, tell and force your fellow thieves to start surrendering what they have been stealing.

see - 9 April 2014

If you don't income tax and if those who corruptly earn high untaxed salaries in the corrupt ZANU PF, where do you think that money will come from? In other countries tax evation like what you Pasi and the Cashbert Dubes of ZANU PF are doing could honestly have seen you behind bars. Short sightedness is a satanic recipe of disaster. You can't sustain corruption or tax evasion and expect to survive the economic pinch.

Ziziharinanyanga - 9 April 2014

well the economy as a whole is shrinking there is no doubt about it , one of the things yet to be thought about is to stop the illegal importation of goods into the counrty, increasing the tax bases than are currently available rather than overtaxing the already overburdened citizens .perhaps we all need to think about what is reasonable pay for parastatal boses, the smith regime perhaps had its people work for years before one could even afford to buy a car but our present structures do not reflect the same idealisms im not saying we should be the same lets try to emulate the good their structures had been based on , which was accountability , responsibility trasparency and intergrity in managing public funds.Abuse has rocked us we may not cry foul in such instance untill we learn to counter our own shorcomings.

clever - 9 April 2014

start to collect from cuthbert dube, then others, revenue will crawl in. do justice to the nation. we are waiting.

think - 9 April 2014

with civil servants payrise effected njuga dzicharema

jack - 9 April 2014

ZIMRA needs to shape up by making it easy for the informal sector to register for VAT and other tax heads that would enable them to trade easily. Countries such as Botswana, Rwanda etc has made registration easy and this has enhanced compliance and ultimately revenue collection. If processes and procedures for tax registration by ZIMRA were simplified and made easy, many in the informal sector would easily register and comply.

Dumisani - 9 April 2014

Bvisai tax yakakwana imika hwitakwi dzinonokora zvadzisina kupihwa.

Mbavha - 9 April 2014

But imi va Pasi makaba here kana kuti kwete? Ko mari yese yamaiwana inokupai rugare here? Ko semutungamiri kubasa, kumba nekuchurch moyo wenyu unofara here nazvo? Ko Mwari vanoti chii? What example are you setting to all these communities ? Does dirty money become clean because you give it to God's work? Just asking.

grace - 9 April 2014

ZIMRA registration processes are a pain and does not encourage people to do so. Now we are hearing rumours they want to tax even the teas we get at our workplace, soon they will tax usage of toilets at our workplaces, casino economy.

Maita Manyuka - 10 April 2014

It becomes a catch 22 situation when the Chief Taxman is himself a tax evader.In all advanced democratic industrialised countries tax evasion is a very serious fraud crime.No-one is exempted from jail time for tax evasion including the rich and famous.Not so in Zimboland where tax evaders are given a hero's welcome.If the government seriously wanted to stimulate economic growth they can simply undo their rigid economic policies of 51% indigenization and pledge security of tenure for all forthcoming investments instead of the so-called "comrades " like Temba Mliswa simply invading thriving companies and claiming ownership. Why also are people like Jim Kunaka allowed to milk the economy's revenue base by collecting "gate pass tax" for buses entering Mbare Musika instead of ZIMRA or City Council doing that duty? At times its hard for people or investors to take this government seriously.

tafamutekwe - 10 April 2014

How does Pasi come to a targetof 273.3 million in a country with falling employment levels and many company closures?

Maita Manyuka - 10 April 2014

Clever,your comment is brilliant but there is no such thing as Accountability,Responsibility,Ttransparency or Intergrity in ZANUPF's mismanagement of PUBLIC FUNDS.

NGWARAI - 10 April 2014

Clever,your comment is brilliant but there is no such thing as Accountability,Responsibility,Ttransparency or Intergrity in ZANUPF's mismanagement of PUBLIC FUNDS.

NGWARAI - 10 April 2014

Clever,your comment is brilliant but there is no such thing as Accountability,Responsibility,Ttransparency or Intergrity in ZANUPF's mismanagement of PUBLIC FUNDS.

NGWARAI - 10 April 2014

we are already in tough times

protestor - 10 April 2014

i was doing a simple analysis for the parastatals salary cut on every employ as commanded by the learned finance minister will reduce pay as you earn by more than 4% of the 58% for civil cervants which i suspect by the increase will be more than 58% no so how then do you plan to meet that because you cut the income and increase the expenditure. and also because most of the employees will have thier salaries cut there will be reduction on spending cutting the value added tax too. Chinamasa dont lean on Moyo too much you are failing soon.

tawa - 10 April 2014

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.