Zimra concerned over rising inflation

Published: 23 January 2018

The Zimbabwe Revenue Authority (Zimra) said it is concerned over the country's rising inflation which reached 3,46 percent in December last year from -0,65 percent in January 2017.

"This is very worrying and could erode the benefits of all initiatives to sustain positive economic growth," Zimra chairperson Willia Bonyongwe said.

"To curb inflation, there is need to destroy the parallel market but as indicated above, this is not achievable in the short -term, other things remaining equal.

"There are also indefensible price increases in the supermarkets of up to 200 percent, fuelling inflation further, and in a United States dollar environment, rising inflation becomes a major threat to economic growth," she said.

NKC Research analyst Sibongiseni Nkota concurred with Bonyongwe and said the monetary side of the economy is still plagued by issues relating to tight foreign exchange liquidity, periodic domestic cash shortages, a thriving parallel exchange market in addition to the bond notes trading weaker than the US dollar.

"Much like the rest of the economy, the monetary environment will benefit from an increase in forex inflows, either via increased foreign investment, more loans being granted to government, or inward migration by Zimbabweans returning home with savings," Nkota said.

"A healthier foreign currency buffer and an easing in tight foreign exchange liquidity will curtail black market trade while also strengthening the value of bond notes, gradually improving confidence in the latter."

This was after some of the recent policies announced by President Emmerson Mnangagwa suggest that the economic landscape will change to become friendlier to investment and business in general.

"That said, it will take some time to address Zimbabwe's considerable macroeconomic imbalances," Nkota said.

Meanwhile, (Zimra exceeded its 2017 gross annual revenue targets by 17 percent on the back of robust strategies that were implemented to enhance revenue collections.

The national tax collector's gross revenue for the year 2017 was $3,978 billion while net collections were $3,75 billion, which surpassed the target of $3,4 billion by $350 million.

Zimra said it collected a net surplus of $350 million, reducing the projected fiscal deficit of $400 million by 87,5 percent.

"As we move into 2018, we will upscale and redouble our efforts to surpass the $4,3 billion target, which is an increase of 26,47 percent from the 2017 revenue target," Bonyongwe said.

Some of the measures implemented by Zimra include enhanced operational efficiency, fighting against corruption and intensified taxpayer education and registration programmes, among a battery of measures.

According to Zimra, 19 414 small and medium enterprises had registered with the revenue collector by the end of October 2017, a move which also improved revenue collections.

The record-breaking revenue collection, which is the highest in four years, can also be attributed to enhanced audits.

In addition, Zimra was also involved in continuously following up on tax debts and negotiating with taxpayers for payment plans, as well as closely monitoring adherence to the agreed payment terms.

- fingaz

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