The Zimbabwean government has widened its tax bracket to include Value Added Tax (VAT) on nearly 40 imported basic food commodities as the country's revenue performance continues to disappoint.
With revenue for the year ended 31 December 2015 coming in 3% lower than prior, the Zimbabwean authorities are looking for all avenues that can boost revenue collections in 2016.
In a recent Government Gazette of January 22, Finance Minister Patrick Chinamasa, amended Section 78 of the VAT Act by repealing clauses that until now allowed the imported food commodities to be taxed at zero rate. The tax is effective from February 1.
Earlier this year the Zimbabwean government revised downwards the travellers' rebate to $200 from $300 in what it said was an effort to maximise revenue collection from imports and address the continued abuse of the facility by local business.
The daily import duty remission was also reduced to $30 from $50 per individual traveller per day.
The drastic moves come at a time the Zimbabwe Revenue Authority (Zimra) said revenue collected for 2015 was 3% lower at $3.5bn.
In its Revenue Performance Report for the year ended 31 December 2015 released on Thursday, Zimra said the revenue collected "reflects the subdued state of the economy".
In 2016, Zimra, said it is going to vigorously enforce all current fiscal legislation to increase level of compliance.
Zimra is also working on introducing cargo tracking in 2016 to cut down on smuggling.
Zimra however said the major challenges facing Zimbabwe's economy remain unresolved.
"These are the erratic supply and high cost of energy, the high cost of capital and unavailability of adequate capital, and the use of the relatively strong dollar, among other factors.
"These economic variables negatively affected profitability of companies and clients' ability to pay debts, resulting in generally low trends of revenue collection," said Zimra.