Thursday, 27 June 2013

New Tax Can Increase Zambia’s Revenue Collection

By Paul Shalala in Pretoria, South Africa

A 36 member country pan-African tax administration body has observed that the best way of increasing Zambia’s tax base is to introduce a new presumptive tax which can capture millions of Zambians in the informal sector.

African Tax Administration Forum (ATAF) Executive Secretary Logan Wort says introducing a presumptive tax will ensure that even players in the informal sector can now start paying tax to improve Zambia’s revenue collection and relieve the burden on the few tax payers in the formal sector.

Mr Wort says the presumptive tax can be levied on each respective business depending on its annual turnover.

He said this kind of tax can be best collected using a mobile phone as has been the case in Kenya where it has been effectively implemented.

Mr Wort said this in the South African Pretoria on Wednesday when he addressed a group of ten journalists from across Africa who are in South Africa on a one week Reuters training in Advanced Financial and Governance Reporting.

Meanwhile, Mr Wort says there is need for African tax administrators to adopt electronic systems of collecting tax in order to avoid corruption.

He said in countries where technology had been employed to collect tax, there is less contact between people and corruption is minimized.

Of the 13 million Zambians, only about 500, 000 are said to be paying tax, leaving millions of potential tax payers out of the tax band.

Zambia was the first country to have ratified the African Tax Administration Forum’s Agreement three years ago ahead of the organisation’s host country South Africa and other African countries.

Since inception , ATAF has carried out research on tax administration on the continent and is advising the thirty six member countries on the best practices of tax administration.

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