Economy almost at Standstill

The Zimbabwean economy is almost at a standstill, with the country failing to meet targeted revenue collections for the first half of the year. According to a statement released by the Zimbabwe Revenue Authority (ZIMRA), net collections for the first half were US$ 1.66bn against a target of $ 1.67bn. ZIMRA said several economic setbacks had consequently led to shrinkage of the revenue base, resulting in the marginal failure to meet set targets. The Revenue Collection Agency said retrenchments, scaling down of operations and company closures were some of the major challenges that had affected revenue collection. Zimbabwe is now more of a consumer-based economy, with value added tax contributing the bulk of the country’s revenue at US$ 517m. while companies contribute only US$185m in company tax. The contribution from company tax had a 10% negative variance. ZIMRA said the performance was negatively affected by the unavailability of affordable long-term as well as working capital to finance operations. Many companies in the country are operating at below 50% capacity. Mining royalties contributed only US$ 81.1m, with ZIMRA saying the depressed performance of the revenue head was mainly due to the softening of international mineral prices, especially gold and diamonds.

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