TREASURY, always in financial distress, lost about $1,6 trillion last year, up 312% compared to the prior year, through tax expenditures consisting of uncollected tax due to exemptions and incentives to corporates, a Zimbabwe Revenue Authority (Zimra) report says.
In 2021, total revenue foregone stood at $388,38 billion.
“The total revenue foregone in 2022 stood at $1,6 trillion compared to $388,38 billion in 2021. The revenue foregone was from exempt supplies, zero rated supplies, rebates, suspensions and trade agreements,” Zimra’s 2022 annual report shows.
The $1,6 trillion loss could have built roads, dams, schools, hospitals, fixed water and sewage reticulation systems, while ensuring improved social services delivery.
Tax expenditures, consisting of trade agreements or concessions, are similarly known as revenue foregone.
In a bid to attract investment, the government has been offering tax incentives to some foreign companies, a move described by civil society organisations as harmful and unfair.
For instance, in 2020 the government exempted Chinese telecommunications giant Huawei Technologies from paying income tax dating back 11 years to December 2009.
In January 2021, Great Dyke Investments, which is developing a platinum mining project in Darwendale, Mashonaland West province, was granted a five-year tax exemption by the government. This was done by Finance minister Mthuli Ncube through an Extraordinary Government Gazette dated January 27, 2021.
Source NewsDay