ZAMBIA TO REVAMP TAX POLICY

Zambia loses sixty billion kwacha (12 million USD) per year in tax fraud and uncollected tax. Tax authorities say the policy will leave no stone unturned because it targets to affect all informal sector workers and will carry heavy punishment for evaders.

The Zambian tax law mandates all citizens with an income of 700.000 kwacha (140 USD) and above, to pay income tax. However most informal sector workers in the same threshold have been evading this tax, a scenario that has caused unfair competition among business community.

The sectors under review will include over 8000 wheel barrow pushers commonly referred to as ZAMCABS, casual laborers operating road side markets and mechanics and dealers in second hand cloths.

ZAMCAB operators in Soweto market say the move to force them pay tax is in the wrong direction adding that their income is far below the assumed value. The tax body is crafting new rules that will help punish offenders some of which will include up to 2 years in jail with heavy fines. The most difficult thing will be finding a means to gauge ones income and calculate how much one can pay.


who is likely to benefit.....

Lusaka city council authorities say despite the nation wide resistance to this policy, it will help achieve the target collection of close to 108 trillion kwacha (216 Billion USD) set by Zambia revenue authority (ZRA). The policy will also help to reduce to improve on foreign reserves that now stand at 2 billion dollars (10 trillion Kwacha) and maintain steady growth of the economy now estimated at 6.3 percent.

Independent economist Love Mtesa urges that this policy should be extended the estimated 5 million people active in Zambia’s working sector. Mtesa says it’s only fair that all those who earn contribute returns to the government however small the amount.

Zambia has an estimated 13 million people with a 200 USD per capita income. Their revenue collections are able to fund only up to 40 percent of it’s budget.

Joseph Basoga