COVID-19 Impact: Customs Duty collections sluggish in Q3 2020

Author Name
Respect Gwenzi
Analysis 10 months ago

“South Africa has opened its borders and cross-border trade is therefore expected to increase thereby feeding into higher collections in import duties”, ZIMRA said.

Harare – Customs Duties, which are usually among the top five contributors to Zimbabwe’s net revenue collections, only contributed 9.40% of total revenues during the third quarter ended 30 September 2020 due to the impact of the lockdown on imports, the Zimbabwe Revenue Authority (ZIMRA) said in a latest quarterly report.

The net revenue collections for the quarter were ZWL57.00 billion, 27.16% above the targeted ZWL44.83 billion.

According to ZIMRA, only food, medicines, protective clothing and machinery were being imported during the period and these were mainly either duty free or subject to duty rebates.

Following the outbreak of COVID-19, governments across the globe responded by enforcing nationwide lockdowns so as to curb the spread of the virus. The restrictions included travel bans and closure of ports of entry, thus minimising import activities.

Meanwhile, Other Taxes comprising Mining Royalties, Withholding Taxes and Other Taxes missed the quarterly targets, mainly due to operational challenges in the mining sector caused by energy shortages and the Covid-19 pandemic.

Leading the revenue collections for the period was Individuals (15.26%), Companies (14.63%), Excise Duty (14.17%), VAT on Local Sales (13.24%), VAT on Imports (13.08%) followed by Customs Duty.

ZIMRA said it is expecting momentum in the revenue collection to gain in the last quarter of the year with the revenue collection target for the year having been increased to ZWD172 billion, partly anchored on relaxation of travel restrictions.

“South Africa has opened its borders and cross-border trade is therefore expected to increase thereby feeding into higher collections in import duties”, ZIMRA said.

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