Zimbabwe tax agency beats first quarter revenue target

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HARARE (Reuters) – Zimbabwe’s tax agency said on Thursday it had collected $862 million in the first quarter of 2017, exceeding its target by 6 percent, helped by automated operations and improved compliance among businesses.

The southern African country, which fell short of its 2016 revenue goal by 4 percent as its economy suffered from weaker commodity prices and a liquidity crisis, expects to collect $3.7 billion this year.

President Robert Mugabe’s government, which fell out with western donors nearly two decades ago amid accusations of human rights abuses and electoral fraud, does not receive significant direct international aid and relies almost entirely on tax revenues to fund its budget.

Zimbabwe’s economy stagnated last year following a devastating drought while its budget deficit exploded as Mugabe’s administration struggled to pay its workers, which helped fan anti-government protests.

Zimbabwe Revenue Authority (ZIMRA) chairperson Willian Bonyongwe said gross revenue collections for the first quarter of 2017 were 10 percent higher than figures for the same period last year.

“This upward trend is a result of a battery of revenue enhancement measures … which include automation, greater enforcement and the fight against corruption,” Bonyongwe said in a quarterly statement.

Value-added tax on local sales, at 22.42 percent, weighed in with the biggest contribution towards the revenue, followed by individual tax at 20.05 percent, ZIMRA said.

Company tax made up 11.2 percent, while mineral royalties, at $16.39 million, exceeded the quarterly target by 21.42 percent on the back of improved output and commodity prices.

The tax agency says it expects better revenue flows this year, following an improved farming season, but has cautioned that an extended bank note shortage Zimbabwe has experienced since the beginning of 2016 will affect economic performance.

Zimbabwe’s government has revised upwards its 1.7 percent economic growth projection for 2017 to 3.7 percent, citing the rebound in agriculture.


(Reporting by Nelson Banya; Editing by Gareth Jones)

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