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Monday, May 27, 2024

Revenue collections register over 12% growth

Story by Stanley James, Business Editor

Zimbabwe recorded over 12% increase in revenue collection to ZWL1 trillion in the first quarter of the year, driven by Value Added Tax (VAT) contributions.

According to a treasury quarterly report covering the period January to March released by the Ministry of Finance and Economic Development this Monday, the increase in revenue collections came after compliance by taxpayers to honour their obligations.

Major contributors to revenue collections include VAT, followed by Pay As You Earn (PAYE), Excise Duty, tax on companies and taxes on financial and capital transactions.

Employment costs mainly in the form of salaries for the public sector workers dominated spending, with most of the revenues being allocated to capital projects.

Government operations also accounted for the bulk of the revenue inflows as most of them were devoted to rentals, service charges and maintenance costs.

Treasury revealed that most of the income was disbursed towards social welfare benefits, vulnerable members of the society and agriculture inputs.

In line with efforts to facilitate transparency in terms of economic development, part of the revenues was also used to service the country’s domestic debt.

The Ministry of Finance and Economic Development reveals that the first quarter had its own fair share of challenges in the form of power supply limitations and the depreciation of the local currency.

Declining global commodity prices for the first quarter also affected exports, resulting in a trade deficit of over US$620 million.

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