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(HERALD) PAYE to contribute 25pc of May revenue

PAYE to contribute 25pc of May revenue
By Walter Muchinguri

THE contribution of Pay-As-You-Earn to total national revenue collection has begun improving as more companies are now paying their employees salaries as opposed to allowances.

Zimbabwe Revenue Authority commissioner general, Mr Gershem Pasi said they were expecting PAYE to contribute at least 25 percent of this month’s revenue.

The contribution would be an improvement from March’s contribution of around five percent.

"We are gradually seeing an improvement in the contribution of PAYE to revenue collection since we adopted the use of multiple currencies and we hope that the trend will continue," he said.

Mr Pasi said Zimra was carrying out an audit on goods being offered employees by their employers in kind, such as groceries.

"Under normal circumstances employers are supposed to calculate the total value of these goods and deduct a percentage of the money which they are supposed to surrender as PAYE but this has not been happening.

"We are therefore, following up on these to ensure that companies pay up," he said.

PAYE has historically been the single biggest source of revenue in the country contributing at least 40 percent to tax revenue.

However, after the adoption of the multiple currency system the contribution of PAYE fell to insignificant levels while the contribution of other taxes like indirect taxes such as Value Added Tax have only started improving.

In January, revenue collection amounted to US$4 million, in February US$13 million, March US$37 and US$54 million last month.

The low revenue receipts have resulted in Government failing to finance its operations including paying its workforce, the civil servants a real salary.

Civil servants have since March been receiving monthly allowances of US$100 across the board, a factor that has also contributed to low receipts from PAYE as the civil service constitutes the country’s biggest work force.

Finance Minister Tendai Biti had to revise the budget for 2009

from US$1,7 billion to US$1 billion due to the low inflows in revenues that were being collected by Zimra.

Mr Pasi was speaking on the sidelines of the 14th Governing Council Meeting of the World Customs Organisation East and Southern Africa region that started yesterday .

The meeting is being attended by heads of customs from at least 14 of the 22 African countries that are members of the regional grouping and WCO secretary general, Mr Kunio Mikuriya.

Acting Finance Minister Elton Mangoma who officially opened the council said the meeting should help boost confidence of the international community in general and prospective investors to invest in the country.

He said the Governing council meeting was crucial as it gives the heads of customs administration and opportunity to share notes and experiences to enhance efficiency and effectiveness.

"As you are all aware, capacity building is one area that customs the world over has begun to put emphasis on in recent years.

"There is need for you as customs administrators to keep abreast with technological developments," he said.

Government, said Minister Mangoma, would support all customs related developmental and modernisation issues in line with the WCO guidelines.

"As we move forward as a region, we need to ensure that all members are assisted in adopting and implementing WCO developed instruments and programmes that facilitate trade, enhance revenue collection and protect the environment," he said.

The outgoing WCO–ESA vice chairman and Director-General of Mozambique Customs, Dr Domingos Tivane urged delegates attending the meeting to place emphasis on the improvement of the quality of services and processes which foster an increase in trade to enhance revenue collection.

He said this was pertinent if the organisations and delegates want to build on the successes that have been achieved so far as well as cope with the world financial crisis.

"In view of the financial crisis, we should review and improve revenue related processes by implementing the WCO Safe framework of Standards as a way to secure and facilitate global and legitimate trade," he said.

The meeting would deliberate on resolutions that were concluded during a steering group meeting that was in session from Monday to Wednesday.

The steering group meeting was a precursor to the Governing Council meeting that ends today.

The WCO is made up of 174 states from across the world.

The 174 states belong to six different regions, one of which is the East and Southern African Region to which Zimbabwe belongs.

Apart from Zimbabwe other members of the Region include South Africa, Lesotho, Namibia, Swaziland, Zambia, Mozambique, Botswana, Angola, Ethiopia, Rwanda, Uganda, Kenya, Burundi, Comoros, Eritrea, Mauritius, Malawi, Djibouti, Seychelles, Malawi and Madagascar.

Labels: GERSHEM PASI, PAYE

posted by MrK @ 2:18 PM