KABANDA CHULU, Lusaka
TOBACCO Institute of Southern Africa (TISA) says efforts by the Zambian government to boost foreign reserves will remain exposed if the continued loss of annual revenue taxes worth K50 million through illicit trade and smuggling is not stopped.
TISA has since called for increased law enforcement and that border controls should be a priority for stakeholders including the Ministry of Home Affairs if Zambia is to address the countryâ€™s revenue losses, resulting from a drop in copper prices, among other factors.
â€œSo profitable is the illicit trade that tobacco products are and the worldâ€™s most widely smuggled legal product today. The illicit trade in tobacco products is a multi-billion-dollar business, fuelling organised crime and corruption, as well as robbing governments of much-needed tax money.
â€œIn Zambia, more than 400 million cigarettes a year enter the market illicitly, counterfeited or tax-evaded, accounting for 30 percent of the product on the market. Stopping the flow of illicit cigarettes on the market can help bridge the national budget deficit gap,â€ according to a statement issued yesterday.
TISAâ€™s estimates indicate that Zambia has a 30 percent incident level for illicit cigarettes, which costs the country a K50 million annual loss in revenue.
â€œCigarettes that find themselves on the market will ordinarily not have had duty paid, were concealed upon entry into the market and also through outright smuggling,â€ it stated.
Last week, Minister of Finance Felix Mutati noted that only Kasumbalesa border post is collecting significant revenue for the government.
Mr Mutati said the tolling system at Kasumbalesa for imports can be replicated in Chirundu, Nakonde and Mwami aimed at widening the tax base and ensure compliance for traders across various sectors.
Earlier this year, British American Tobacco Zambia, together with the Zambia Chamber of Commerce and Industry signed a three-year memorandum of understanding with the Drug Enforcement Commission to improve working conditions of the commission and, ultimately to ensure successful crime prevention and prosecution.
KABANDA CHULU, Lusaka