NAC targeting lower AIDS levy collections due to weak economic activity

NAC targeting lower AIDS levy collections due to weak economic activity

Minister of Health David Parirenyatwa

THE continued company closures and low economic activity negatively impacted AIDS Levy collections resulting in the National AIDS Council of Zimbabwe (NAC) missing its 2015 target collection by eight  at US$35,2 million.

According to NAC, the collections were 9 percent down year on year at US$35,2 million compared to US$38,7 million in 2014. NAC has since set a much lower collection target for this year of US$32,3 million.

AIDS levy is charged on individuals, companies and trusts at a rate of three per cent of the amount of income tax assessed and the fund is collected by the Zimbabwe Revenue Authority. It is administered by the NAC, a state enterprise under the Ministry of Health and Child Care.”

The levy finances a wide range of HIV and AIDS-related programmes. Between 2009 and 2015, about $192.6 mln was raised and part of the money was spent on programmes while the remainder is held in various investments.

The programmes funded through the levy include supporting the antiretroviral therapy programme through the procurement of medicines and equipment as well as supporting vulnerable children.

Meanwhile, Government is contemplating scraping the Aids levy and introducing a holistic National Health Fund which will draw its funds from the fiscus, bringing relief to the country’s tax-burdened workers and companies.

Apart from Aids levy, Zimbabweans also pay 3.5% of their salaries up to a fixed level towards the National Social Security Authority, Pay As You Earn which is at least 20 percent of taxable income above $250 (tax-free threshold), while VAT is at 15 percent, withholding tax for companies in the informal sector stands at 10 percent, and Capital Gains Tax for profits accrued from the sale of immovable property is a flat five percent.

Tax collector, ZIMRA has since noted that the level of distress within the tax paying community continues to rise owing to the challenging economic environment.

Net revenue collections for 2015 declined 3% to $3.5 billion moving further away from the key $4 billion mark as the tax base continues to shrink.

According ZIMRA’s performance update for the fourth quarter of 2015, revenue was realized largely from Individual Tax [which contributed 22%], Excise Duty [20%], VAT on Local Sales [16%], VAT on Imports [13%], Company Tax [12%], and Customs Duty [10%]. FinX

Follow us on Twitter on @FingazLive and on Facebook – The Financial Gazette

Connect With Us

Fingaz Polls

Should medical practisioners demand cash upfront from patients on medical aid?