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Zim companies, individuals struggling to pay tax

May 12 2016 19:16
Malcom Sharara

Harare - Zimbabwean companies are struggling to pay tax resulting in revenue mobilisation failing to meet targets, according to the Zimbabwe Revenue Authority (ZIMRA).

In its report for the first quarter of 2016 released on Thursday, ZIMRA said it was struggling to restrain the tax debt which rose 30.9% from $1.97bn at the end of 2015 to $2.58bn by the end of Q1 (2016).

“It is noteworthy that the breakdown of this debt is 0.18% government, 26.77% municipalities, parastatals and state owned entities, and 73.05% private entities,” said ZIMRA.

“The debt is composed of 53.12% principal, 20.23% penalty and 26.65% interest.”

Revenue collected for the first quarter of the year fell by 9.75% due to depressed economic activity, widening tax debt, non-compliance by taxpayers, corruption and lack of complete automation.

ZIMRA said performance can be largely attributed to the economic environment which has remained harsh, even worsened by the shift in the rainy season, and the inadequate rainfall due to the El Nino phenomenon.

“A drought season adversely impacts on the whole economy because of the intricate linkages between the agricultural sector and the rest of the economy,” said ZIMRA adding that performance was also affected by liquidity situation which depressed the operations of the few companies still functional.

ZIMRA said although the economy was evidently going through “troubled waters” there is much Zimbabweans should do by themselves.

“Firstly to curb all unnecessary consumption of imports and concentrate on increasing productive capacity with the resources available.”

“Secondly, immediately review our cost structures including linking executive salaries and packages to productivity,” said ZIMRA.

zimbabwe  |  africa economy  |  taxes
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