Zimbabwe’s revenue agency targeting SME to boost revenue collection

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Zimbabwe’s revenue agency said Wednesday it plans to widen the tax base by targeting the small and medium enterprise (SME) sector, among others, in order to boost revenue and economic growth.

Speaking at a meeting with journalists, Zimbabwe Revenue Authority (ZIMRA) Acting Commissioner-General Regina Chinamasa said the world over, successful economies are sustained by domestic resource mobilization.

“As an Authority, we are widening our tax base and the SMEs are one of our prime targets. It has been noted that the majority of SMEs are not registered taxpayers and are not remitting anything to the fiscus and yet their revenue at times surpasses those of some of the companies in the formal economy,” Chinamasa said.

She said there is vast potential in SMEs to contribute to the fiscus and based on the legislative changes made, they expect to see the sector beginning to grow and contribute to the fiscus.

“Various programs are now on the way to educate this sector so that they become part of the tax-paying community. Going forward, efforts are underway to improve the tax framework for SMEs and provide practice notes to guide them as taxpayers,” she said.

Chinamasa said voluntary tax compliance is the mainstay of sustainable revenue collection, hence ZIMRA was working on a number of initiatives to encourage voluntary compliance.

The Acting Commissioner-General called upon the nation to shun and condemn corruption, noting that it was one of the biggest non-tariff barriers that make the country’s products less competitive on the international market and erodes investor confidence.

She said her organization has put in place several measures to fight corruption which include the whistleblower facility, the anti-corruption hotline and disciplining members of staff in accordance with the law, assets declaration and lifestyle audits.

The revenue agency has adopted a five-year strategy running from 2021 to 2025 that is anchored on digitalization to improve efficiency and revenue growth.
ZIMRA’s director for strategy, research and innovation, Joey Shumbamhini, told the same gathering that since 2017, ZIMRA had been consistently and persistently exceeding revenue targets.

He said the strategy focuses on repositioning the revenue agency to play its critical role in the economy through enhanced revenue collection, improvement in ease of doing business and trade facilitation, among others.

“Through the strategy, we seek to maximize revenue collection. Zimbabwe’s compliance culture is still very low. We believe there is a lot of revenue out there that is available for collection. We believe there are a lot of people out there who are supposed to be paying taxes but are not paying taxes either out of ignorance or delinquency and we should work together to make sure that everyone contributes to the fiscus,” Shumbamhini said.

He said the country had seen a lot of unregistered taxpayers, following the rapid informatization of the economy over the years, hence the need to simplify tax processes and ensure everyone pays taxes.

He said as part of their drive to fight corruption, ZIMRA, through the strategy, will embark on a drive to digitalize and transition from manual to automated processes to reduce corruption.

In that regard, ZIMRA is in the process of acquiring a new tax and revenue management system for domestic taxes, a project which is being jointly funded by the African Development Bank and the Zimbabwean government, Shumbamhini said.

“This is a completely new system that is going to replace the current tax system and this is a long-term project whose completion date is 2023. The impact on the nation is that the new tax system will improve the ease of doing business.

“Each and every person would have what is known as a tax identification number (TIN). A unique TIN will change how taxes are paid. It will change because everyone will be accountable,” he said. Enditem

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