Zimbabwe tax system hit by low compliance levels

Zimbabwe tax system hit by low compliance levels
Published: 20 October 2018 (138 Views)
Zimbabwe's tax system is characterised by low compliance levels as registered corporate taxpayers are not remitting their dues, a tax expert has said.

Speaking at The Financial Gazette tax review conference last week, Christina Muzerengi, a tax partner with Grant Thornton, said the three tier pricing system in the country was making it difficult for business to keep up to date with their tax obligations.

"Compliance is a major challenge that business is facing in this country. The penalties being charged on late payments are not helping the situation either as they are creating a huge bill in the tax players accounts.

"It has become difficult to make income tax estimates in this environment because of the changes that constantly happen," she said.

The Zimbabwe Revenue Authority (Zimra) recently said about 60 percent of registered taxpayers were not up to date with their tax payments.

The national tax collector is currently owed over $4 billion in unpaid taxes.

Muzerengi described the level of tax compliance in Zimbabwe as among the lowest in Africa as many taxpayers were not on the Zimra tax register.

She said the country's tax system was also characterised by high tax evasion, tax aversion, high tax rates and high levels of corruption.

The tax collector has been making use of full remission of penalties and in some cases, interest, to try and encourage tax compliance.

While the tax collector has bemoaned low compliance levels, it is interesting to note that it has been surpassing its monthly and annual revenue collection targets.

A cross-section of taxpayers however, accuse Zimra of squeezing companies out of business. Taxpayers lamented that Zimra's tax regime was anti-capital and promotes non-compliance.

"Business is looking for polities that will stimulate the much needed growth…Taxation has been a thorny issue when is comes to stimulating business growth. Our tax rates are one of the highest in the region," she said.

Meanwhile, Zimra confirmed that high debts are negatively affecting optimum revenue collection, as obligations increased to $4,55 billion during the third quarter ended September 30, 2018.

"The authority's performance is set to continue on a positive trajectory in boosting revenue collections through various revenue enhancement strategies as well as maintaining the momentum in the fight against corruption.

"Despite the positive performance, high debt continues to negatively affect optimum revenue collection," Zimra said.

Debt which recorded $4,54 billion as at end of second quarter, increased to $4,55 billion as at end of the third quarter, the national tax collector said.

Revenue performance for the third quarter of 2018 surpassed set target for both gross and net collections.

Gross collections amounted to $1,28 billion against a target of $1,089 billion.

Net collections stood at $1,19 billion after deducting refunds of $95,94 million during the quarter, translating to 8,84 percent above the expected $1,089 billion.

Net revenue collections during the review period increased 22,56 percent from $967,76 million recorded during the previous prior quarter.

Excise duty contributed 21 percent to revenue while net value added tax (VAT) on local sales contributed 19 percent and individuals contributed 18 percent.

Individual tax surpassed the target of $212,21 million by 1,26 percent. Revenue collected amounted to $214,88 million, a 10,68 percent increase from $194,15 million collected during the previous comparable period.

- dailynews

Tags: Zimbabwe, Tax, Zimra,
 0

You May Like These Videos

Comments

There are no comments.

Latest stories

Deadly ZANU PF officials plot to oust Mnangagwa

by Mandla Ndlovu | 21 January 2019 | 7 Views

Emotions charge up as Army victims are buried

by Mandla Ndlovu | 21 January 2019 | 10 Views

BREAKING: Mnangagwa dumps Davos trip and heads home

by Mandla Ndlovu | 20 January 2019 | 486 Views

Kazakhstan firms keen on Zimbabwe investment

by Staff reporter | 20 January 2019 | 174 Views

No South African bailout for Zimbabwe

by Staff reporter | 20 January 2019 | 303 Views

Zimbabwe security services to use brutal force

by Staff reporter | 20 January 2019 | 319 Views

Zimbabwe on brink of diplomatic row with US, Germany

by Staff reporter | 20 January 2019 | 351 Views

Econet to reimburse subscribers over shutdown

by Staff reporter | 20 January 2019 | 158 Views

BREAKING: MDC Chairperson Tabitha Khumalo goes into hiding

by Mandla Ndlovu | 20 January 2019 | 206 Views

Four simple Rules to solve the Zim financial crisis

by Colls Ndlovu | 20 January 2019 | 269 Views

'Dodgy' NGO blasts Mnangagwa's government

by Staff reporter | 20 January 2019 | 454 Views

Bulawayo looting had SA flare

by Staff reporter | 20 January 2019 | 248 Views

Cry my beloved Zimbabwe . . . as country is closed for business

by Staff rpeorter | 20 January 2019 | 194 Views

Zimbabwe's horror 2019 unfolds

by Staff reporter | 20 January 2019 | 268 Views

Price hikes fail to end fuel crisis

by Staff reporter | 20 January 2019 | 165 Views

Mnangagwa faces uphill task to re-engage world

by Staff reporter | 20 January 2019 | 166 Views

Security roadblocks all-over Zimbabwe

by Staff reporter | 20 January 2019 | 164 Views

Mnangagwa must just do the right thing

by Staff reporter | 20 January 2019 | 176 Views

Soldiers warn organisers of last week's demonstrations

by Staff reporter | 20 January 2019 | 241 Views

Chamisa's violence streak

by Staff reporter | 20 January 2019 | 185 Views

MDC hawks in the dock

by Staff reporter | 20 January 2019 | 144 Views

Mnangagwa forges ties with Azerbaijan

by Staff reporter | 20 January 2019 | 168 Views

Zimbabwe counts cost of violent stay-away

by Staff reporter | 20 January 2019 | 181 Views

Zanu PF goes mad – Zimbabwe Vigil Diary

by ZimVigil | 20 January 2019 | 183 Views

Felton Kamambo defines his reign

by Staff reporter | 20 January 2019 | 118 Views

'Chamisa and his allies will be held accountable'

by Staff reporter | 20 January 2019 | 139 Views

MDC-Alliance's orgy of violence

by Staff reporter | 20 January 2019 | 146 Views

Is Chiyangwa behind board divisions?

by Staff reporter | 20 January 2019 | 134 Views

'Mnangagwa, take us back to Egypt!'

by Bishop Lazarus | 20 January 2019 | 154 Views

Chitungwiza looters are well-known

by Staff reporter | 20 January 2019 | 122 Views

'Information as a threat to national security'

by Senator Monica Mutsvangwa | 20 January 2019 | 164 Views

Govt avails $1 per route buses

by Staff reporter | 20 January 2019 | 144 Views

Civil servants start receiving allowances

by Staff reporter | 20 January 2019 | 152 Views

Fuel deliveries resume

by Staff reporter | 20 January 2019 | 135 Views

Fifa to pay $8 million Zifa debts

by Staff reporter | 20 January 2019 | 113 Views