THE weak domestic revenue mobilisation (DRM) system has contributed to hardships in the Zambian economy as it has not been effective in collecting domestic tax including that from the informal economy, says Centre for Trade Policy and Development (CTPD) executive director Isabel Mukelabai.
Ms Mukelabai attributed Zambia’s economic hardships faced in the last quarter of 2015 to a weak DRM system which had also brought about a decreased budgetary allocation to most social sectors.
In a statement, Ms Mukelabai said that a vast informal economy which included workers and companies were operating outside the reach of the law or public administration and had not been taxed effectively, which was a major obstacle to broadening the tax base and collecting direct taxes in Zambia.
“CTPD notes that Zambia, faced with economic hardships for much of the last 2015 to date, has decreased its expenditure as a percent of the Budget to most of its social sectors.
‘‘This was mainly due to weak domestic revenue mobilisation and issues of poor revenue performance.
“The Domestic Revenue Mobilisation system has not been effective in collecting domestic tax; there are a lot of gaps especially with regards to taxing the informal economy,’’ she said.
In Zambia a vast informal economy – workers and companies operating outside the reach of the law or public administration – is not being taxed effectively; this is a major obstacle to broadening the tax base and collecting direct taxes in Zambia, she said.
Ms Mukelabai called on Government to allocate more funding to the 2017 child focused national Budget expenditure to help accelerate the fulfilment and realisation of child rights.
She said that CTPD had collaborated with key stakeholders drawn from Government ministries, civil society organisations, community based organisation, academia and the private sector and had convened a national level stakeholders meeting focused on proposed increased child expenditure for the 2017 national Budget.
She observed that while Government had made improvements to prioritise the welfare of children’s rights, more needed to be achieved as concerted efforts were required in the education, social protection and the health of children as it was still limited.
Ms Mukelabai urged Government to allocate more resources to the fight against child trafficking and enhance sensitisation programmes to fight child marriages and issues to do with gender through the new policy for early child marriage.