HARARE, Oct 19 (Reuters) - Zimbabwe surpassed third quarter tax revenue by 19 percent due to improved collections, tax agency Zimbabwe Revenue Authority (ZIMRA) said on Thursday, but added that informal businesses were not meeting their obligations.
Tax collections are crucial for President Robert Mugabe’s government, as they fund 90 percent of the annual national budget because Zimbabwe cannot access international credit due to arrears on its foreign debt.
ZIMRA chairman Willia Bonyongwe said the agency had collected $1.03 billion for the quarter ending September against a target of $864 million.
All tax contributions, including individual and company tax grew, with the exception of mining royalties, which at $16.6 million, was 24 percent below target.
Bonyongwe said most informal businesses were not paying their dues, leaving the burden on a few who are formally employed.
ZIMRA had also observed “lavish lifestyles” among Zimbabweans, who were building expensive properties, buying posh vehicles and importing expensive goods but did not pay taxes.
Bonyongwe said ZIMRA was carrying an audit on lifestyles of some people to determine the source of their income.
“It is not fair that formally employed people earning very little always pay tax whilst the so called ‘informal’ business people get away with tax evasion,” Bonyongwe said.
Eight out of 10 Zimbabweans of working age do not hold a formal job with the majority running informal businesses or selling goods on the street. Government is the biggest employer and public sector wages average $350 a month. (Reporting by MacDonald Dzirutwe; Editing by James Macharia)