Zimbabwe misses 2016 revenue target by 4 pct

Zimbabwe's tax agency missed revenue target for 2016 by four percent after collecting 3.4 billion U.S. dollars against a target of 3.6 billion dollars due to poor performance of the economy.

The 3.4 billion dollars was also 10 percent lower than the 3.8 billion dollars collected in 2015.

Declining commodity prices, reduction in national production, a stronger U.S. dollar and foreign currency externalization were among the factors that undermined economic growth in 2016 and hence affected revenue collection, said Zimbabwe Revenue Authority (ZIMRA) chairperson Willia Bonyongwe on Thursday.

"In the absence of any significant foreign direct investment, the economy had low investment levels, declining levels of unemployment and low income levels. Consequently, aggregate demand for goods and services continued to fall and this had an adverse impact on all tax heads during the year," she said.

As companies continue to choke under a poor performing economy, many are failing to pay their tax obligations and this resulted in debt which stood at 1.97 billion in January 2016 soaring to 2.67 billion at the close of the year.

The revenue authority, however, recovered 1.11 billion dollars from outstanding debt in 2016, Bonyongwe said.

"Collections were negatively affected by the growing debt. Most people do not take their tax obligations seriously and due to corruption have gotten away with it in the past but the system has caught up with them," she said.

Out of the revenue heads, mining royalties recorded one of the biggest declines and was down 43 percent after collections stood at 62.9 million dollars against a target of 110 million dollars.

The Zimbabwe government says the economy grew by 0.6 percent in 2016, the lowest since 2009 but is projecting the economy to recover and grow by 1.7 percent in 2017 on the back of an anticipated improved agriculture season. Endit