Zimbabwe's tax revenue below target, mining royalties fall

By: 
Reuters

ZIMBABWE'S tax revenue for the third quarter came in below target after mining royalties and company tax fell in an economy struggling with weak commodity prices and high unemployment, the tax agency said on Monday.

The Zimbabwe Revenue Authority (ZIMRA) raked in $878 million in tax revenue between July and September against a target of $964 million, the agency's chairwoman Willia Bonyongwe said, missing its stated target by 9 percent.

ZIMRA collected $884.5 million during the corresponding period in 2014.

Mining contributes more than half of all export earnings in the Southern African nation, but weak metal prices, especially of platinum and gold, are hitting Zimbabwe's earnings.

Bonyongwe said mining royalties were 55.6 percent below target at $17.27 million. When compared to the same period last year, mining royalties fell 48 percent from $33 million.

The fall in revenue "can be attributed to the depressed international mineral prices and lower sales than anticipated as a result of non-production and reduced production by some mining companies," Bonyongwe said in a statement.

Value added tax on the sale of local goods was 15 percent below target while company tax at $85 million was 31 percent short of target, the agency said.

This reflected weak consumer demand and companies forced to close due to high operating costs, competition from cheaper imports and electricity shortages, it added.

Without any balance of payment support and starved of foreign credit, Zimbabwe is running its budget hand-to-mouth, leaving it with virtually no money for infrastructure.

Zimbabwe has halved its growth forecast to 1.5 percent this year but most economists say the Southern African country could fall into recession for the first time since 2008.

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