THE Zimbabwe Revenue Authority (Zimra) has uncovered ZiG$1,92 billion and US$595,2 million in unpaid taxes following rigorous audits and investigations, shedding light on the extent to which firms have struggled to pay their obligations under a deteriorating landscape.
Analysts said some of the outstanding taxes related to tax evasion.
Zimra’s report for the second half ended December 31, 2024 said the authority was owed ZiG2,4 billion and US$744 million in unpaid taxes by public and private entities.
Most of the taxes have accrued as companies have struggled to balance between a demanding taxation regime — one of the world’s highest — and keeping companies afloat.
Reports say many firms have moved into the informal sector to escape Zimbabwe’s heavy-handed approach on defaulters, even as companies endure a tough liquidity crunch that has ended with bankruptcies.
Zimra said of the total debt, domestic unpaid taxes stood at ZiG1,8 billion during the review period.
In US dollar terms, a further US$674,96 million was outstanding.
Outstanding trade taxes amounted to ZiG556,41 million and US$69,05 million.
- Zimra seizes CCC campaign vehicle
- ZDI defends AK-47 rifles 'smugglers'
- Firearms smuggling suspect weeps in court
- Fresh calls to scrap 2% tax
Keep Reading
Zimra has implemented various strategies to recover outstanding taxes, including audits and thorough investigations.
“The authority is owed by both private companies and public institutions, including state enterprises and parastatals,” said Antony Mandiwanza, Zimra board chairperson, in the report.
“Notably, 80% of the outstanding debt stems from new assessments resulting from thorough audits and investigations, reflecting the authority’s proactive approach to identifying and addressing discrepancies.
“The remaining 20% represents uncollected current obligations, and the authority is actively implementing strategies to ensure timely tax collection. These efforts support Zimra’s ongoing mission of enhancing fiscal responsibility.”
The tax authority indicated that refunds amounting to ZiG1,99 billion were paid during the period under review, representing 2,81% of gross collections.
Mandiwanza said the proportion of refunds decreased from 3,69% in the first half of 2024 to 2,81% in the second half, due to policy measures that shifted most products from zero-rated status to either standard Value-Added Tax (VAT) rates or exemptions.
During the review period, Zimra collected ZiG110,50 billion in gross annual tax, surpassing the target of ZiG105,73 billion by 4,51%.
“This positive variance reflects strong performance across key revenue streams, indicating effective tax collection and improved compliance. After accounting for refunds totalling ZiG3,38 billion, net collections stood at ZiG107,12 billion, which is 1,31% above the target,” he said.
“The robust performance in net collections underscores the resilience of the tax system despite external challenges. This achievement demonstrates the effectiveness of fiscal measures and highlights Zimra’s administrative efforts in meeting revenue expectations amid fluctuating economic conditions.”
Most revenue was contributed through Excise Duty (11%), individuals (22%), and VAT (30%), comprising VAT on local sales of about 19% and VAT on imports at 11%.
Total net revenue amounted to ZiG69,22 billion, surpassing the target by 7,15%.
Mandiwanza attributed this performance to the effectiveness of Zimra’s revenue generation strategies, supported by exchange rate stabilisation, which created a more predictable economic environment.
“This stability gave businesses confidence in short to medium term planning. A new policy streamlining exemptions and zero-rated goods also boosted VAT on local sales, exceeding its target by 88%,” he said.
“This was further complemented by onboarding VAT taxpayers to the newly-introduced fiscalisation data management system, enhancing real time data sharing. The growth of digital money transfer platforms also bolstered revenue, with Intermediated Money Transfer Tax performing remarkably in the second half of the year.”
Zimra aims to collect US$7,155 billion in revenue this year, a 17% increase from the 2024 target.
Mandiwanza noted that this ambitious goal is supported by revenue-enhancement measures, including improved tax compliance, expanded digital platforms, and greater administrative efficiency within the tax authority.
l The exchange rate as at December 31, 2024: US$1:ZiG25,8.
