Editor's Comment

Support ZRA to achieve more

RAISING revenue to meet huge public expenditure in various sectors is the principal purpose of taxation in every country.
Governments can only function effectively if revenues are largely generated locally, rather than always depending on external funders. Zambia, whose focus is the Vision 2030 aimed at attaining the middle-income status, is on track with regard to widening the domestic tax base.
The Zambia Revenue Authority (ZRA) has announced that in the first quarter of this year, it has managed to collect K794 million above its target of K10.3 billion. If individuals and organisations in the country embraced the law and adhered to voluntary payment of taxes, including withholding tax on house rentals, the authority would collect far much more money, locally, than it did in the past three months.
Out of the K71.6 billion for this year’s national budget, ZRA has been given a target to collect K44.6 billion. With the various measures the authority is currently putting in place – leading to a positive outlook such as the current one where it has exceeded its target for the first quarter – it is likely to surpass that mark by the end of 2018.
Given that the country’s external debt stands at US$8.7 billion, it is no longer healthy to rely on loans and grants to support the national budget. Resources which Zambia needs for its social and economic development should therefore be realised through local taxpayers.
This is why we agree with ZRA commissioner general Kingsley Chanda’s view that Zambians, especially the business community, should change their mindset and develop a culture of voluntary compliance so that they should be paying taxes without being followed by the authority.
Through the various platforms that ZRA has employed as it promotes tax education among citizens and businesses, it is creating awareness not only on the need for people to pay taxes, but also that there are consequences for non-compliance. It is good that the authority’s interventions are aimed at promoting voluntary compliance.
With a broadened tax base, Zambia can become self-reliant. Government will then be able to use local revenue on projects that should benefit citizens through employment, stabilisation of prices of goods, infrastructure that supports socio-economic development, efficient and effective service delivery, among others.
Zambia is currently considered a lower middle-income country; the reason why most external donors have scaled down their funding. However, if we begin raising more funds locally, there will be no need to borrow, and the external debt will eventually reduce drastically.
Therefore, ZRA should be commended for its efforts in ensuring that all players in the economy fulfil their tax obligations to Government. It is citizens themselves who, in the long run, will reap benefits through increased economic activities.
Measures that ZRA has introduced include clamping down on smuggling and under-declaration on imported products such as crude and finished edible oil. Also, apart from reviewing operations at border posts and appointing more tax agents who will ensure that businesses in the country comply with tax obligations, the introduction of electronic fiscal registers (EFR) will also play a major role in ensuring that shop owners remit correct taxes to the authority.
What better system can there be than EFR, which will enable ZRA to receive information as transactions will be punched onto the machines in shops? Wherever there will be non-compliance, follow-ups by the authority’s officials will be easier.
Those that deliberately try to circumvent their tax obligations should be dealt with as strongly as the law allows. ZRA officers cannot be expected to be everywhere all the time, so law-abiding citizens and other residents should provide the eyes and ears for the authority.
This is especially so in outlets that have a tendency of deliberately not recording their financial transactions. Every ngwee counts. Failing to pay taxes is tantamount to depriving Zambians of services that Government is expected to provide.
While sensitisation on the need for individuals and organisations in the country to pay taxes continues, let us all support ZRA in its efforts to make Zambia self-reliant as the country develops using local revenue.

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