BURS exceeds collection target by P1bn
Pauline Dikuelo | Friday July 13, 2018 14:11
The tax agency’s latest annual report, released on Monday, shows that total revenue collected for the 2016-2017 financial year was P3.5 billion higher than the original target for the year of P32.3 billion.
Data in the report shows that income tax collected for the year was P17.7 billion against a target of P15.7 billion, while VAT collected was P6.3 billion against a target of P7.5 billion. Customs revenues received were P11.7 billion against a target of P11.5 billion.
“The increase (in total tax collected) was attributable to the strong performance of income tax and VAT,” the agency said in notes accompanying the annual report.
Higher tax collections are associated with a stronger performance by the economy, which bounced back with 2.9 percent growth from a 1.7 percent contraction in 2015. The higher tax collections were also made despite the closure of BCL and Tati Nickel mines in October 2016 and a general downturn in mining. BURS chairperson, Taufila Nyamadzabo said it was important for all stakeholders to prioritise tax collection as the country’s traditional revenue streams decline.
“We need you more than ever, especially in this difficult time where our revenue streams are diminishing to help us devise means that will enhance our tax collection mandate,” he said. The record performance in 2016 came off the back of difficult years for the BURS, which forced the agency to reduce its collection targets in 2014 and 2015. BURS commissioner general, Ken Morris explained that the two years were affected by a subdued economy coupled with poor performance of the mining industry. Morris said the BURS submitted proposals to the Ministry of Finance and Economic Development (MFED) to amend some provisions of the BURS Act.
These include reducing the administration provisions in the revenue acts to a single Act that would achieve both simplicity in administration and also streamline existing provisions that are common in the revenue acts.
“This continued throughout the year with the assistance of an expert provided under the auspices of the IMF’s AFRITAC South,” he said.
The commissioner general said the revenue service had procured sniffer dogs and cargo scanners for some areas.
“Some scanners for various entry points will continue to be procured in phases throughout the 2014–2019 strategic plan period.
Other ongoing initiatives include development and implementation of a track and tracing system, a single window system, customer service improvement as well as development of a customer needs analysis survey and promotion of inter-agency cooperation,” he said.
The tax agency, however, suffered in its efforts to recover arrears owed, as these actually rose during 2016-2017 from P2.2 billion to P2.7 billion. “The growth in the debt is mainly attributed to interest and penalties, which account for 66% of the arrears whilst the principal tax outstanding is 34%,” Morris said. “Efforts will continue to be made to reduce the arrears in the next financial year.”