A recent report by NewsDay Business has revealed that the Zimbabwe Revenue Authority (Zimra) is grappling with a substantial debt burden, underscoring the prevailing economic challenges facing both private companies and public institutions in the country.
According to the authority's revenue performance report for the first half of 2024, Zimra is owed a staggering US$421.4 million and ZiG854.72 million by various entities, including private businesses and state-owned enterprises.
"The authority is owed by both private companies and public institutions such as State enterprises and parastatals," Zimra stated in the report, highlighting that the debt is primarily composed of new assessments from audits and investigations, as well as uncollected taxes.
The shortfall in tax revenue could be a reflection of the tough economic conditions experienced by firms operating in Zimbabwe. The report indicated that the debt consists of US$113.37 million and ZiG506.39 million in trade taxes, as well as US$308.03 million and ZiG348.33 million in domestic taxes.
The authority attributed this performance to the introduction of a new currency, which has ushered in a more stable economic environment, prompting businesses to adapt swiftly to ensure their sustainability. Additionally, initiatives to enhance revenue generation, such as increased remuneration for some companies, improved consumption patterns, and increased electronic-based transactions, contributed to the positive results.
Despite the debt burden, Zimra's overall revenue performance for the first half of 2024 was positive, with total net revenue standing at ZiG36.06 billion against a target of ZiG35.39 billion, resulting in a 1.88% positive variance.
However, the report also noted that the companies' collections fell short due to competition from the informal sector and reduced trade transactions resulting from economic instabilities in the first half of the year.
Looking ahead, Zimra projects a positive revenue performance and aims to collect revenue in excess of ZiG55 billion in the second half of 2024. The tax collector emphasized a strategic approach focused on improving revenue collection, fostering economic resilience, and promoting sustainable resource mobilization through tightening tax compliance measures and enhancing the efficiency of tax administration.
As Zimbabwe navigates the economic challenges, Zimra's efforts to address the mounting debt and improve revenue collection will be crucial in supporting the country's development goals and ensuring economic stability.
