Hard times … Finance minister, Patrick Chinamasa
Taxes finance government’s entire budget because lenders such as the International Monetary Fund (IMF) 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 $2.58bn, or 18% of gross domestic product (GDP) during the first quarter, from $1.97bn 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 $862m after collecting $725m. The figure was 10% lower than last year.
The agency collected $13.4m 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 purchasing 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.
Post published in: Economy