Home » Business » Mining Royalties Surpass Target By 45 Percent

MINING royalties for the first six months to June exceeded target by 45 percent to $112,6 million, but concerns remain that ongoing company closures could reduce revenue streams in the last half of the year after collections declined in the second quarter, the tax collector said on Tuesday.

Miners paid off outstanding levies in the first half of the year, the Zimbabwe Revenue Authority (Zimra) commissioner-general Gershem Pasi said, but net revenue collections amounted to $1,72 billion against a target of $1,74 billion as the productive sectors continue to underperform.

Individual taxes which account for a quarter of the country’s revenue collections were 24 percent above target at $429,5 million as Zimra tightened collections on Pay As You Earn (PAYE) tax.

Value Added Tax (VAT), the second largest contributing segment, stood at $232 million against a target of $346 million due to a fall in capacity utilisation on the manufacturing sector and decline in disposable incomes resulting from company closures, Zimra said.

“The projects undertaken by the authority have recovered previously unpaid PAYE tax which gly boosted the performance of the revenue head.

“This pattern is however not predicted to continue in the medium-term, nor does it imply any corresponding responsiveness of indirect taxes like value added tax and excise,” Pasi said in the revenue performance report for the first half of 2014.

He said despite Zimra’s efforts to tighten collections, the economy was characterised by closure of companies, scaling down of operations as well as retrenchments which affect revenue collection.

“The anticipated positive boost of indirect taxes from retrenchment packages is not realised as retrenching companies struggle to pay the retrenchees while those receiving their packages prefer to save or invest rather than spend,” Pasi said.

The tobacco levy contributed $9,8 million against a target of $8,8 million driven by a recovery in tobacco output, Pasi said.

“The revenue performance for the first half reflects the underlying economic environment currently obtaining. An improvement in the economic outlook as envisaged under the ZimAsset blueprint would boost revenue performance,” Pasi said.

Source : New Zimbabwe

Archives