Business Writer
The Zimbabwe Revenue Authority (ZIMRA) will be conducting visits to assess tax compliance across all tax heads at a time when revenue to the treasury is falling short of targets.
The country’s revenue collector notified stakeholders that all taxpayers with outstanding returns are reminded to submit them without further delay.
Late submission of returns and late payment of taxes will attract penalties.
It stated that returns should be completed fully and submitted on time through the TaRMS, new tax administration that ZIMRA introduced early this year. Payments for all taxes should be remitted in full and on time in the currency of trade.
In the eight months to August, the Government collected ZiG48,5 million, against a target of ZiG54 million, representing a variance of 10,05 percent, according to Government financial accounts for August, 2024,
Total revenue for August 2024 was ZiG 7,49 billion, falling 3,84 percent short of the budgeted ZiG 7,79 billion.
Key shortfalls were seen in taxes on income, down 18,73 percent and VAT, down 16,79 percent. However, customs duty and taxes on financial transactions outperformed, partly offsetting the deficit.
Year-to-date, revenue stands at ZiG 51,65 billion, underperforming by 6,72 percent.
Zimbabwe is grappling with significant challenges in tax collection, primarily due to the high level of informality in the economy and the increasing prevalence of cash transactions.
Despite the Government’s efforts to introduce presumptive tax to capture revenue from the informal sector, it has only managed to collect a meager 3 percent of the targeted amount during the first eight months of the year.
The Government introduced presumptive tax, a fixed-rate levied on informal businesses that do not maintain proper financial records.
The tax applies to specific sectors, including hair salons, bottle stores, and public transport operators.
The primary goal of presumptive tax is to integrate informal businesses into the formal tax system, thereby expanding the tax base and boosting Government revenue.
The financial accounts shows that ZiG 35,2 million was collected against a target of ZiG 1,2 billion in the first eight months of this year, highlighting the significant challenges the Treasury faces in collecting revenue from the informal sector.
At the same time, most transactions are cash-based and conducted in foreign currency. Even some companies, while partially paying in US dollars, are opting for cash payments, with only the ZiG portion being taxed.
