Zim misses revenue target as economy stutters

Harare - Zimbabwe missed its revenue target for the half-year to June 2014, with the revenue authority blaming the poor performance on a “myriad of challenges”.

Revenue for the period under review amounted to US$1.6bn against a target of $1.7bn, resulting in a negative variance of 6%. Net collections declined by 3% from the same period last year, during which $1.7bn was collected.

In a statement released on Wednesday, Zimbabwe Revenue Authority (Zimra) chairperson Willia Bonyongwe said the first half of the year was characterised by a myriad of challenges which affected economic performance.

“The challenges we faced include liquidity constraints, limited lines of credit from financial institutions, power outages, retrenchments and company closures,” said Bonyongwe. She added that such challenges have seen some clients failing to honour their tax obligations, resulting in the authority missing the set target for the first half.

Bonyongwe said individual tax collections of $379.5m were 12% lower than the $429.5m collected for the same period last year. She blamed the decline on retrenchments and company closures.

Corporate income tax was 15% lower than the prior year on the back of the depressed economic environment, which has negatively affected the profitability of companies.

Value added tax was 33% short of target, with Zimra attributing the subdued performance to low disposable income in the hands of consumers.

There was also a 65% decline in mining royalties to $39.8m as a result of depressed international prices and lower sales.