HARARE – Zimbabwe collected $1.8 billion in taxes during the first six months of this year, exceeding its target by 8 percent, while its full-year forecast has been revised up on better economic growth prospects, the tax agency said yesterday.

President Robert Mugabe’s government is relying on the Zimbabwe Revenue Authority (ZIMRA) and local banks to fund its national budget since it cannot borrow from foreign financial institutions due to arrears dating back to 1999. Company tax collections, which underperformed last year, exceeded forecasts by 36 percent due to higher profitability in the banking sector and better use of tax monitoring technology, ZIMRA board chairman Willia Bonyongwe said in a statement.

At $34 million, mining royalties were 23 per cent above target, thanks to firming global commodity prices. More than 50 per cent of Zimbabwe’s export earnings come from minerals like gold, platinum and nickel.

Bonyongwe said ZIMRA was revising up its full-year target to $3.4 billion from an initial $3.2 billion due to higher than expected economic growth of 3.7 per cent this year.

The ZIMRA board chairman, however, said the tax agency was owed $3 billion at end of June, from $2.67 billion in January.

US dollars are fast disappearing in Zimbabwe, forcing banks to limit cash withdrawals.

The central bank said on Wednesday it wanted to issue more "bond notes” beyond its stated limit of $200 million, in comments likely to stoke fears the country is returning to the era of money printing and hyperinflation.

Agencies.