Govt rakes in $166 million from two percent tax

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GOVERNMENT racked in $166.15 million in the last three months of 2018 arising from the two percent per dollar transacted tax (Intermediate Money Transfer Tax) introduced by Finance minister Mthuli Ncube in October.

Cumulative collections for 2018 amounted to $177.27 million with $11.12 million collected at the previous rate of $0.05 per transaction during the first nine months.

The revenue head grew by 848.30 percent from $18.69 million collected in 2017, Zimbabwe Revenue Authority (ZIMRA) said in its annual revenue performance report as at December 2018,

“Revenue collections in 2018 surpassed target with the authority collecting a gross of US$5.36 billion or 21.80 percent of GDP, which is 24.71 percent above the target of US$4.30 billion. Net collections amounted to US$5.061 402, which is 20.57 percent of GDP,” ZIMRA said in the report.

ZIMRA attributed its ability to reach the $5 billion mark, in part to the revision of the Intermediated Money Transfer Tax (IMTT).

The authority added that improved efficiency and effectiveness of the ZIMRA team, as well as enhanced compliance level from taxpayers.

Revenue collections with a total of US$177.27 million. A total of US$11.12 million was collected from IMTT before the revision in the first 9 months of 2018 whereas US$166.15 million was collected after the revision for the last quarter of 2018. VAT refunds amounting to US$297.14 million were attributed to a backlog of VAT refunds that were paid.

Meanwhile Zimra said revenue heads that include VAT on imports, customs duty and carbon tax performed well above their targets.

“VAT on Imports Collections for 2018 amounted to US$523.98 million against a target of US$401.00 million, resulting in a positive variance of 30.67 percent . In comparison to 2017, revenue collections grew by 35.07 percent from US$387.92 million collected then,” ZIMRA said.

“The positive performance of the revenue head is attributed to high demand for imports following relaxation of import controls by the government in order to supplement deficiencies in supply of locally produced goods.”

“Elsewhere, customs duty gross revenue collections for 2018 were $435.96 million against a target of $358.88million.

“The performance of imports continued to increase in response to demand for essential goods that were not available on the local market, ZIMRA said. 

“Excise duty revenue collections were $908.88 million against a target of $815.31 million resulting in a positive variance of 11.48 percent.  The main contributors were Beer, Air Time and Fuel, each contributing 9.32 percent, 12.68 percent and 71.34 percent, respectively. Excise duty was the highest contributor to total revenue collections in 2018.”

“Performance of the revenue head is attributed to increased supply of petroleum products. The demand for petrol and diesel was heightened by cross border travellers who preferred to fuel in Zimbabwe due to its flexible exchange rate of Real Time Gross Settlements. Petrol imports increased by 39.92 percent from 407.49 million litres in 2017 to 570.17 million litres in 2018 whilst diesel imports increased by 26.84 percent from 834.40 million litres in 2017 to 1.06 billion litres in 2018,” ZIMRA said.