ZIMRA Revenue Figures- Is the Growth Real?

ZIMRA Revenue Figures- Is the Growth Real?

The Zimbabwe Revenue Authority has surpassed its revenue target for the first quarter of the year, collecting over $2 billion, which is 41,5 percent above its set target of 1,4 billion. The statistics were released by Zimra chairman Dr Callisto Jokonya in his revenue performance report for the quarter ended March 31. “Revenue performance for the first quarter pf 2019 surpassed the set target in both gross and net terms. During the quarter, gross collections amounted to $2,059 billion, which was 41,5 percent against the set target of $1,455 billion . “After deducting refunds of $114,98 million, net collections were $1,944 billion. This translates to a positive variance of 33,62 percent above the target of $1,455 billion,” Dr Jokonya said.

Zimbabwe Financial Analysis

In an inflationary environments, it is very important to be stay alive to the possibilities of reporting failure as success. Below we explain how the Nominal Revenues for Q1 2019 tell a different story when we factor in Inflation Granted Gross Revenues were 41% ($2.06b) above the target of $1.46b as widely reported. A positive variance of $600m should be something to cheer about had we been operating in an environment without Inflation.

Zimbabwe Economic Situation

With an Inflation rate of 67%, It is important to adjust the Nominal Revenue Figures to get the Real Revenues. This helps us to assess the Real Value per $1 collected. Using this method the Real Revenues for Q1 is $1.03b versus a target of $1.46b representing a negative variance of $430m. So whilst we are celebrating that we have surpassed the targets by 41% and 85% on a YoY Basis, it is important to keep it at the back of our minds that inflation is one animal that can be very deceptive and can leave us to celebrate our failures as successes. Excepts from: https://www.herald.co.zw/zimra-exceeds-target-by-40pc/ Analysis by ZimBollar Writer