ZIMBABWE’S tax collector, Zimbabwe Revenue Authority (Zimra) says revenue collections for this year are expected to maintain a positive trajectory as the economic environment continues to recover from the devastating effects of the 2019 Cyclone Idai and a protracted drought.
Zimra has managed to surpass the net revenue target for the first half of 2021 despite the disruptions caused by the COVID-19-induced lockdowns.
In the first half of this year, net revenue amounted to $195,18 billion against a target of $180,45 billion, which is 8,16% above target.
Going forward into the second half of 2021, the authority is “confident” of exceeding the remaining period’s targets which will ultimately lead to surpassing the 2021 annual net revenue target of $387,4 billion.
Last year, Zimra collected net revenue of $181,96 billion, surpassing the 2020 annual net revenue target by 5,85%.
“The economic environment continues to improve in 2021 on the backdrop of heightened implementation of the National Development Strategy One (NDS-1).
“Inflation eased by 255,99% points from 362,63% in January 2021 to 106,64% in June 2021,” the tax collector said in its 2020 annual report released last week.
“Generally, the exchange rate remained stable during the first half of 2021. The stability of exchange rates together with the waning of inflation continues to instil some confidence in the economy, thereby boosting economic activity that has a positive effect on tax revenue collections.”
“Revenue collections are expected to maintain a positive trajectory as the economic environment continues to improve since the devastating effects of Cyclone Idai and a protracted drought,” it said.
Zimra said the recent reports by World Bank and the International Monetary Fund (IMF) that projected a 3,9% and 6% growth respectively for the year 2021 reinforce the optimistic expectation of a 7,8% growth projected by the government.
This is underpinned by a bumper harvest for the 2020/21 agricultural season, increased energy production and rebound in manufacturing and construction activities, Zimra said.
Zimra board vice-chairperson Josephine Matambo said the resumption of lockdowns in January 2021 was a sign that there could be a protracted negative impact of COVID-19 to business operations.
“On a positive perspective, the good 2020/2021 agricultural season and the continued stabilisation of the foreign exchange rate through the foreign exchange auction platform is expected to inject growth in the economy,” she said.
“Zimra expects that this growth will translate into a corresponding real growth in tax revenues in the year 2021.
“As such, Zimra is committed to leverage on these positive developments to drive its revenue growth agenda. Efforts will be made to upgrade our tax systems in order to provide secure access to information on a continuous basis,” Matambo said.
Finance minister Mthuli Ncube, through his permanent secretary George Guvamatanga, appreciated ongoing efforts by the authority to meet set targets, adding it was
“important to assess such performance against the maximum potential to collect revenues, in particular, considering the untapped potential concealed in various policies that still require full implementation.”
While celebrating the positive revenue performance, Ncube said it remained crucial for the government tax collector to swiftly address policy implementation bottlenecks, particularly with regards to the fiscalisation programme and the attendant value-added-tax refunds mechanism.