eBusiness Weekly
Enacy Mapakame Business Writer
The Zimbabwe Revenue Authority (ZIMRA) has processed $450 million in tax refunds to companies as part of efforts to bring business continuity during the Covid-19 crisis, a senior official had said.
The Covid-19 pandemic has caused severe strain on businesses and economies in general as companies downsized operations in implementation of national lockdowns and social distancing.
Covid-19 induced challenges are expected to continue in the near to long-term period resulting in reduced revenue collections, at a time the country needs financial resources to fight the pandemic and economic development projects. In response to the challenges being faced, Zimra has come up with initiatives to improve business such as speedy payment of tax refunds.
“As a result of a continuous review of the operational efficiency of all Declaration Processing Centres, bulk Bills of Entry were introduced to expedite clearance of the essential commodity especially the importation and movement of grain.
“The Authority is playing its part in business continuity by expediting Tax Refunds due to clients. A total of $450,9 million refunds were processed in Q1 2020,” said chairman Josephine Matambo in a statement accompanying Zimra report for the first quarter to March 31, 2020.
Due to the pandemic, businesses have also made calls to Government for tax relief measures in order to give them breathing space at a time they are constrained.
One of the proposals was the speedy processing of tax refund due to clients.
The tax authority has acknowledged the gravity of the Covid-19 pandemic to businesses and its adverse effects on revenue collections.
“The global economy is facing an imminent recession due to the Covid-19 pandemic whose impact on business will affect revenue collections.
“Some of the negative effects of the pandemic will be felt immediately, while others will be long term.
“Zimra operations have been directly affected by the pandemic that has forced the Authority to operate with skeletal staff.
“Statutory Instrument (SI) 83 of 2020, which effected the necessary national lockdown that directed all businesses to shut down, except for a few essential industries such as those that manufacture and provide foodstuffs , will indisputably affect revenue collection.
“Overall, the Covid-19 pandemic is expected to severely affect business operations and consumption, resulting in reduced revenues at a time the Government is in dire need of funding to fight the pandemic and provide the necessary social support nets for its citizens,” she said.
In order to mitigate the impact of the lockdown on the much-needed domestic resources, the Authority has put in place a number of online platforms to enable taxpayers to continue making their payments and meeting their fiscal obligations during the national lockdown.
According to the Q1 report, Zimra upgraded its e-service platforms which has enabled 78 percent of taxpayers obtain their 2020 tax clearance certificates.
Additionally, the tax authority is also developing business rules on electronic clearances of private importers to facilitate trade, improve efficiency and minimise contact of clients with officers at the ports of entry, in the wake of the Covid-19 pandemic.
During the quarter under review, revenue collected grew 613 percent $13,88 billion compared to same period in the prior year, which also surpassed targets by 10 percent.
All revenue heads registered growth in nominal terms. The growth was necessitated by exchange rate based price adjustments which resulted most tax payers realising higher sales revenue therefore increasing their tax liabilities.
Major revenue contributors were individuals and excise duty that accounted for 17 percent and 16 percent respectively while companies and VAT on local sales contributed 14 percent each. VAT on imports came in at 11 percent.
