The Zimbabwe Revenue Authority (Zimra) has announced gross collections amounting to $1, 28 billion against a target of $1, 089 billion in the third quarter of this year, according to the latest quarterly revenue report. Net revenue collections for the third quarter improved by 22, 56 percent from the $967,76 million realised during the third quarter of 2017.

Major contributors to the revenue were Excise Duty at 21 percent, Net Value Added Tax (VAT) on Local Sales at 19 percent and individuals at 18 percent.

Permanent secretary in the Ministry of Finance and Economic Development George Guvamatanga attributed the positive revenue performance to "concerted effort by the Authority through rigorous revenue enhancement measures, an unwavering stance against corruption, increased use of electronic and mobile money in transacting which resulted in improved compliance."

Individual Tax, Company Tax, VAT on imports, Customs duty, Excise duty, Carbon tax, Mining royalties and Withholding tax on Contracts surpassed set targets for the quarter.

Performance of VAT on Local Sales was compromised by high VAT refunds which amounted to $94,67 million, an increase of 53,39 percent from the same period last year.

Other revenue heads such as DFIR, CGT and CGT Withholding as well as Tobacco Levy and other indirect taxes also performed below expectation, said Zimra.

But the majority of the revenue heads performed exceptionally well.

"Third quarter 2018 has shown astounding improvement in all revenue heads in comparison to the same period in 2017," said the permanent secretary.

"The intensive implementation of revenue enhancement measures by the Authority enabled steady inflows and reduced revenue leakages.

"Inflationary pressures played its own role increasing nominal values of goods and services."

Mr Guvamatanga said the Authority will continue to be "resolute in implementing planned revenue enhancing measures and uphold zero-tolerance to corruption."

Last week, Zimra commissioner-general Faith Mazani said the tax collector was making representations to Treasury to review the tax structure for small and micro enterprises.

Currently, according to Zimra, the operations of SMEs may give rise to obligations for any or all of the following taxes: Presumptive Tax, Income Tax, Value Added Tax (VAT), Pay As You Earn (PAYE), Withholding Tax (WHT), among others.

This has resulted in numerous small businesses failing to meet their tax obligations.

But Ms Mazani said work in progress to segment taxpayers in relation to their capacity and business models which are large client taxpayers, medium client taxpayers, small client taxpayers and micro taxpayers so as to ensure efficiency in revenue administration.

Restructuring of the tax models for small and micro businesses could see the latter paying a turnover-based tax, while micro-businesses could be set to pay a fixed rate.

But the commissioner-general admitted that the proposed tax restructuring for the lower segments will require an adjustment of the relevant tax laws.

Zimra is guided by several pieces of legislation, but critically by the Income Tax Act and the 2017 Finance Act (No.2).