Govt should consider lowering taxes, says ZACCI


GOVERNMENT should seriously consider lowering taxes to encourage compliance to tax laws, says Zambia Chamber of Commerce and Industry (ZACCI) president Geoffrey Sakulanda.

Mr Sakulanda said currently Government operated on the basis that it wanted to capture as much money as possible for its operations.

“But in the process it overtaxes the corporate businesses which eventually start making losses. So we need to lower taxes because currently Government operates on a basis that they want to capture as much money as possible to run Government and so they overtax corporate businesses,” he said

He said Government should streamline the tax regime so that it was simple, predictable and easy to administer to encourage compliance of tax laws.

Mr Sakulanda said in an interview that streamlining the tax regime would enable more people to pay taxes, hence Government collecting more revenue.

“So we would like a situation where you lower taxes, streamline the tax regime so that it is simple, predictable and easy to administer; that way you encourage compliance of the tax law,” he said.

Mr Sakulanda explained that because of high taxes companies started recruiting clever accountants to find ways of dodging taxes so they come up with clever schemes to inflict shift expense abroad, record a loss and not pay taxes in the end.

He said it was time Government started taxing the informal sector where Zambia was losing as much as 40 percent of potential revenue in the economy.

“There is the issue of taxing the informal sector, it has grown, a research by ZIPAR shows that Zambia is losing as much as 40 percent of potential revenue in the economy because we are not taxing the informal sector.

“Take for instance Soweto market, that place makes money but not a single tax is paid there because there is no record, people just transact on a person to person,” he said.

Mr Sakulanda said it was through taxing the informal sector where countries such as China and India had grown their economies.

“The revenue authority thinks it’s expensive to tax the informal sector, but how do countries such as India and China do it to grow their economy?

“They make sure everyone pays taxes, we need to find new ways of taxation which will not only capture the informal sector but also lower costs,” he said.

He also said there was need to focus on incentivising the manufacturing and food processing, agriculture and tourism sectors.

“Those are areas with potential to grow the economy and highest potential of employment generation so when you combine those two factors, you are rolling back poverty especially in the agriculture sector,” he said.

Categorized | Business

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