Editor's Comment

Falsehoods painting Zambia black

ZAMBIA is currently focused on getting an International Monetary Fund (IMF) bailout to help improve the economy suppressed by many factors.
The country is also in need of investment in various sectors of the economy to alleviate challenges that many Zambians are facing.
Therefore, all stakeholders’ efforts should be pointed towards managing the discussions with IMF to help the country get the best. The discussions should also be anchored on issues that would help attract investors to the country.
At this critical stage of the country’s engagement with IMF, it is important that the right and true messages are sent out there to help investors make informed decisions.
That is why Zambia Revenue Authority (ZRA) commissioner general Kingsley Chanda has cautioned the Zambia Chamber of Mines (ZCM) against issuing misleading statements which could erode investor confidence.
In its 2020 report dubbed ‘a policy brief for a post-COVID Zambia Economy; The Road to Recovery’, the Chamber of Mines said the mines are owed US$1 billion VAT refund. ’
The statements made by ZCM have potential to send wrong signals to the outside, especially the IMF and potential investors.
The issue of taxation around mining has been a perennial topic of discussion in Zambia with policy changes that suggest that the mines are more powerful than Government.
Within policy-makers, there does not seem to be consensus on a final resolution, giving rise to everyone who has a platform to throw their figures around.
Ideally, figures coming from ZCM and ZRA should have been the same. If not, as the case is, the figures should have been reconciled so that the same figure is given to the public.
Until that happens, debate regarding the most appropriate tax policy will continue in Zambia. ZRA is responsible for tax collection – whether in the mines or not.
So, where did ZCM get the information which ZRA is refuting?
This entanglement is sending mixed messages to the outside world, especially the investors – both foreign and local – whom Government is targeting to help improve the economic status of the country.
Investors bring foreign direct investment, or FDI, a cornerstone for both Government and corporations.
By encouraging foreign direct investment, Government can create the much-needed jobs, widen the tax base and ultimately improve economic growth.
Zambia desperately needs FDI because it is critical for economic stimulation, development of human capital, increased employment opportunities as well as the availability of access to management expertise, skills, and technology.
Zambia needs both an IMF bailout as well as local and foreign investors to balance the country’s socio-economic development needs.
Wrong information such as the one being purveyed by ZCM has potential to scare away investors because it is painting Government through the ZRA in bad light.
ZRA is obliged by law to collect taxes on behalf of the treasury for the benefit of the entire nation.
ZCM, on the other hand, has the interest of its members at heart but that is not an excuse to wash dirty linen in public.
It is important for the ZCM and ZRA to engage behind the scenes unlike the current scenario.
Dialogue is the way to go for a win-win situation.
ZCM should guide its members and should not unjustifiably oppose any rise in taxes.
ZCM should put the country’s interest above everything else and help ZRA raise the desired taxes to develop Zambia.

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