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Harare - Zimbabwe’s revenue collector anticipates a bleak economic outcome and revenue collection for the year to December 2014.
In comments accompanying its revenue performance for the year ended December 31 2013, the Zimbabwe Revenue Authority (Zimra) said the prevailing economic environment may negatively affect flows of revenue in 2014.
Commenting on the anticipated performance of revenue from individual tax, Zimra said retrenchments and company closures may negatively affect future flows of revenue under this revenue head.
Zimra however said revenue collections from individual tax may improve slightly in 2014 because of the proposal to tax monthly income above US$20 000 at a flat rate of 50%.
According to Zimra, revenues from company tax are also expected to drop significantly in 2014 if the current environment persists as more companies are likely to scale down operations.
Tax on domestic dividends and interests is also expected to be insignificant.
Zimra said the dividend and interest revenue head is not expected to contribute much in 2014 because of persistent challenges that slow down economic growth.
“Not much activity is anticipated from both the money and stock markets,” said Zimra.
On value added tax, Zimra said the current economic slump and liquidity crisis will continue to negatively impact on the VAT revenue head.
Capacity utilisation for most industries is worsening amid the current economic challenges, which is negatively affecting VAT performance on local sales.
“However, the introduction of VAT on exports of unprocessed minerals (diamonds and platinum) will go a long way in improving this revenue head’s performance provided there are significant exports,” said Zimra.
Commenting on the anticipated performance of revenue from Tobacco Levy, Zimra said tobacco farming hectares have been increasing annually and this may entail more revenue coming from the 2014 tobacco selling season.
Zimra on Thursday published its revenue performance report for the year 2013, where total collections for the year amounted to $3.43bn against a target of $3.64bn. This resulted in a negative variance of 6%.
PAYE, VAT, Excise Duty and Corporate Income Tax contributed the bulk of revenue.
- Fin24
In comments accompanying its revenue performance for the year ended December 31 2013, the Zimbabwe Revenue Authority (Zimra) said the prevailing economic environment may negatively affect flows of revenue in 2014.
Commenting on the anticipated performance of revenue from individual tax, Zimra said retrenchments and company closures may negatively affect future flows of revenue under this revenue head.
Zimra however said revenue collections from individual tax may improve slightly in 2014 because of the proposal to tax monthly income above US$20 000 at a flat rate of 50%.
According to Zimra, revenues from company tax are also expected to drop significantly in 2014 if the current environment persists as more companies are likely to scale down operations.
Tax on domestic dividends and interests is also expected to be insignificant.
Zimra said the dividend and interest revenue head is not expected to contribute much in 2014 because of persistent challenges that slow down economic growth.
“Not much activity is anticipated from both the money and stock markets,” said Zimra.
On value added tax, Zimra said the current economic slump and liquidity crisis will continue to negatively impact on the VAT revenue head.
Capacity utilisation for most industries is worsening amid the current economic challenges, which is negatively affecting VAT performance on local sales.
“However, the introduction of VAT on exports of unprocessed minerals (diamonds and platinum) will go a long way in improving this revenue head’s performance provided there are significant exports,” said Zimra.
Commenting on the anticipated performance of revenue from Tobacco Levy, Zimra said tobacco farming hectares have been increasing annually and this may entail more revenue coming from the 2014 tobacco selling season.
Zimra on Thursday published its revenue performance report for the year 2013, where total collections for the year amounted to $3.43bn against a target of $3.64bn. This resulted in a negative variance of 6%.
PAYE, VAT, Excise Duty and Corporate Income Tax contributed the bulk of revenue.
- Fin24
