Maravi

CSPR observes govt inertia in implementing taxes

COMMENT - The non-payment of taxes by people in the informal sector is NOT the problem. The problem is the non-taxation of $2.5 billion in profits made in the mining sector every year. That is where the money is, and that is also the money that is fleeing the country into foreing bank accounts. At least people in the informal sector spend everything they have in Zambia. Even if it is on imported manufactured goods as well as locally grown food.

CSPR observes govt inertia in implementing taxes
By Kabanda Chulu in Kitwe
Tue 05 Oct. 2010, 04:00 CAT

CIVIL Society for Poverty Reduction (CSPR) executive director Patrick Mucheleka yesterday observed that the government is reluctant to impose taxes and implement them with the necessary political will to attain revenue targets under its (government’s) fiscal policy.

Commenting on the admission by parliamentary chief whip Vernon Mwaanga that the country’s revenue base has been declining, Mucheleka said there were many ways in which the Zambian government could create revenue other than focusing on the formal sector.

“The latest Central Statistical Office (CSO) Living Conditions Monitoring Survey (LCMS) report states that 83 per cent of Zambians who work in the informal economy, 56 per cent of which is based in the urban areas, pay no taxes at all, and the government is seemingly reluctant to impose taxes and implement them with the requisite political will to attain revenue targets under the Government’s fiscal policy,” he said.

He noted that the administration of VAT had weakened, a development that could largely be attributed to inefficient and incomprehensive ways of VAT collection.

“Many basic measures to ensure maximisation of monies collected through VAT are not adhered to by many commercial entities and there is no notable commitment to enforce them. For example, cash registers; there is still a large section of business going on with no record of sale because of the lack of such simple measures. This affects how much money can be collected by ZRA,” Mucheleka said.

“In addition, Zambia has much potential wealth in the area of gemstone mining, though the sector has remained unregulated. There is need for government to put in place measures that will promote domestic gemstone miners and ensure that reasonable revenue is raised from the mining of gemstones.”

He suggested that the government create more jobs and opportunities through incentives for value addition in all sectors for exportation if it wished to continue collecting revenue from people.

“One of the immediate opportunities will be to create enterprises to add value to agricultural produce. For instance, Zambia can take a leaf from other African countries such as Ghana and South Africa who produce drinks from locally grown fruits such as mangoes and pineapples. Such initiatives can have multiplier effects in Zambia by creating employment in rural areas and adding value to excess produce that will otherwise go to waste. In the current arrangement, there is more incentive to defraud or evade tax,” warned Mucheleka.

On Sunday, Mwaanga addressed a budget sensitisation workshop for parliamentarians in view of this Friday’s proposed budget announcement by finance minister Situmbeko Musokotwane.

Labels: CORRUPTION, CSPR, PATRICK MUCHELEKA, TAXATION, VERNON MWAANGA

posted by MrK @ 12:23 PM