Zambia losing huge revenue in tax breaks, says expert

Fri, 24 Feb 2017 10:13:48 +0000

By BUUMBA CHIMBULU

TAX breaks are gobbling colossal sums of Zambia’s revenue base and they should, therefore, be removed, Civil Society Organisations (CSOs) have appealed to Government.

Water Aid country representative Pamela Chisanga observed that tax breaks encouraged loss of revenue as most companies left Zambia as soon as the breaks were over. She was speaking at a public discussion of Zambia’s economic recovery programme in Lusaka recently.

“Tax breaks must be removed because we are losing quiet a significant portion of revenue in terms of tax breaks. For instance, in 2013 two companies left the country as soon as the tax break was over,” Ms. Chisanga said.

“Because of tax breaks are related to dividends, we were unable to collect US$18 million in revenue. This is one area we can look at to increase our sources of revenue as a country,” she said.

Ms Chisanga emphasised that some investors took advantage of the tax incentives offered by the Government, thereby affecting the country’s economy negatively.

“Our strong appeal to the Government is that it must consider the issue of tax incentives and the discretions around it,” she observed.

She said CSOs believed that these discretions were likely to leave room for corruption in the process of negotiating for the incentives.

“CSOs believed that tax incentives only worked to the advantage of companies that had connections to the decision makers,” she said.

Ms Chisanga has since appealed to Government to publish a tax expenditure report for the benefit of the country.