The Zimbabwe Revenue Authority contends it would significantly surpass its annual revenue target for 2017 amid revelations collections currently stand 8 percent ahead of the 2017 full year target of $3,7 billion, largely driven by revenue measures that improved tax compliance.
Zimra has often said it intensified audits and enforcement activities, improved operational efficiency, and client engagement initiatives to enhance revenue collections. The authority also now uses electronic tracking devises to prevent false declarations for tax evasion.
The revenue out-turn for 2017 is good tidings to Treasury, as it follows the 2016 National Budget overrun which nearly breached the $1 billion mark, driven by inescapable expenditures, including funding key import substitution programmes. The deficit is projected at over 1,8 billion in 2018.
The major drivers behind the overall $902,2 million 2016 Budget overrun were expenditure interventions in support of recovery of agriculture.
Minister Chinamasa said such expenditures totalled $615 million, an over- expenditure of $549 million on the original 2016 Budget provision of $66 million. The situation was not different this year.
The tax collector, at $3,42 billion gross collections in 2016, missed its revenue target by 4 percent. The acute shortage of financial resources has seen Government going into overdrive in terms of borrowing, situation economic analysts have warned crowded out the private sector.
Zimra chairperson Willia Bonyongwe, commenting on the stellar 2017 revenue performance, said that the full year revenue collections could still significantly increase given that Zimra was still receiving fourth quarter tax submissions.
“The revenue performance was 8 percent ahead of budget, net of refunds, as at 22 December, 2017, but officials will bring an update for the full year. The strong performance has been due to the revenue measures undertaken.”
Zimra’s 2017 third quarter performance was also satisfactory under the prevailing circumstances. The economic performance during the (Q3, 17) remained good and the outlook relatively bullish. The major drivers of the economy were essentially agriculture and mining sectors.
On one hand, diamond production increased during the quarter as a result of capital injection into the Zimbabwe Consolidated Diamond Company. Government’s expansion of Command Agriculture increased production, but also had a huge multiplier effect on the economy. The expansion into livestock, poultry and fishery to the mix, would boost aggregate demand.
However, Zimra said this out-turn glossed over serious threats to the economy, arising from the worsening liquidity crisis and shortage of foreign currency to fund critical inputs for industry and agriculture on time and adequately.
Going forward, Zimra said then that revenue performance could be adversely influenced by the fluctuations on key economic variables on both the domestic and global scene.
Chief among the threats, Zimra said, were the rising domestic inflation, continued foreign currency shortages and the perennial liquidity crunch. Globally the impact of Brexit and a move towards protectionist policies in US and Europe could adversely impact on trade with these countries.