IMPROVED profitability in the private sector saw Zimbabwe’s corporate income tax surpassing target by 69,7 percent in the first half of 2018, the Zimbabwe Revenue Authority (ZIMRA) said.

Despite a tough operating environment for most tax compliant firms, ZIMRA chairperson Willia Bonyongwe said corporate income tax collections stood at $356,32 million against targeted $210 million.

“This translated to 69,67 percent positive variance. Revenue collections grew by 66,30 percent compared to the same period last year where collections were $214,27 million.

“The positive performance is attributed to improved profitability by some companies, as well as increased usage of electronic and plastic money,” she said recently.

Similarly, most listed counters recorded improved profits in the first half.

ZIMRA ― which recently issued a tax moratorium for tax offenders in a bid to boost collections ― also acknowledged that an amnesty offered to taxpayers had resulted in higher collections.

“A number of corporate taxpayers responded to the amnesty to clear their outstanding debts or agree on payment terms to benefit from the remission of penalties and interest,” the ZIMRA boss said.

This comes as industry has called on government to review the country’s tax regime, arguing that it remains the highest in the region.

“Zimbabwe cannot be open for business if the Minister of Finance is taxing heavily those who want to invest in the country, be it domestic and international,” Zimbabwe National Chamber of Commerce chief executive Chris Mugaga said at a recent congress.

However, following concerns, he is on record saying “if you do not want to be taxed, please do not . . . expect better service delivery”.

Bonyongwe said future prospects for the second half and revenue projections against anticipated increased business activity looked positive.

“H1, 2018 collections represent 53,48 percent of the annual target of $4,3 billion. If this trend is to continue, the authority will exceed the 2018 target.

“The authority projects a growth driven by increased economic activity, the honouring of payment plans by companies that took advantage of the amnesty and continued efforts to encourage voluntary compliance and enforcement activities against delinquent taxpayers.

“With a thrust towards voluntary compliance, the authority will expand taxpayer education and engagement, simplify compliance processes and encourage voluntary disclosure,” she said.

Meanwhile, despite the economic hardships that the country experienced, ZIMRA’s gross collections were $2,41 billion against the targeted $2,10 billion, surpassing the set target by 15,09 percent.