Zimbabwe tax agency says Q1 arrears at $2.6 billion, misses revenue target - CNBC Africa

Zimbabwe tax agency says Q1 arrears at $2.6 billion, misses revenue target

Southern Africa

by Reuters 0

Mugabe's Zimbabwe is struggling to remain afloat, tax revenue sees record lows. PHOTO: Wikipedia

Zimbabwean tax payers owed $2.6 billion at the end of March, a 31 percent rise from last year, the tax authority said on Thursday, adding that it failed to meet revenue targets due to a depressed economy, company closures and job losses.

Taxes finance the entire budget in the southern African country because lenders like the International Monetary Fund and World Bank have said they will only resume supporting Zimbabwe once it clears its debts with the global lenders.

Zimbabwe Revenue Authority (ZIMRA) chairperson Willia Bonyongwe said tax arrears for municipalities, state-owned firms and private businesses increased to $2.58 billion, or 18 percent of gross domestic product (GDP) during the first quarter, from $1.97 billion during the same period last year.

Drought-stricken Zimbabwe is struggling with weak mineral commodity prices that have squeezed public finances and caused a shortage of dollars.

Bonyongwe said ZIMRA also failed to meet its target of $862 million after collecting $725 million. The figure was 10 percent lower than last year.

The agency collected $13.4 million from mineral royalties, nearly half of its target.

Tax evasion and corruption were also to blame for low collections, Bonyongwe said, adding that ZIMRA would cast its net wider in order to meet its target by the end of the year.

ZIMRA's chief and five managers have been suspended after their purchase of luxury cars which were undervalued by a local dealer in order to pay lower import duty.

The IMF said in its latest report it would send a team of tax experts to Zimbabwe in the first half of this year to help authorities improve efficiency in tax administration.