ZRA must optimise tax collection
THE issue of tax evasion is a concern for various Governments around the world. Tax authorities continue to face challenges from both local businesses and multinational corporations.
In Zambia has the challenge has been to ensure that traders, local manufacturers and multinationals pay taxes due to the treasury.
The situation has been compounded by lack of capacity at the Zambia Revenue Authority (ZRA) to enforce tax collection.
At various trading centres such as Kamwala in Lusaka, some traders do not issue receipts for goods bought.
Many customers don’t even bother asking for this proof of transaction that includes tax that should be remitted to the ZRA.
This tendency is costing the country millions of Kwacha in revenue that could significantly improve funding of various projects and public services across the country.
We, therefore, welcome the announcement by the ZRA that it is undertaking remedial measures to optimise revenue collection and mitigate the various avenues of possible leakage of government revenue.
ZRA has urged commercial banks and mobile payment solution providers to join the e-payment platform to help reduce the cost of doing business.
ZRA Commissioner-general Berlin Msiska, says that one of the measures taken to mitigate revenue losses is the introduction of e-payment to enhance service delivery.
ZRA needs to also improve its capacity to monitor multinational corporations to ensure that they pay the due taxes.
Some multinational firms have been using transfer pricing, by setting of the price for goods and services sold between controlled (or related) legal entities within an enterprise.
For example, if a subsidiary company sells goods to a parent company, the cost of those goods is the transfer price and this has been costing many countries millions.
The announcement by the ZRA commissioner general needs to be followed up by action and support by all.
The ZRA is backed by appropriate laws to collect taxes but it cannot be expected to be in all places all the time.
It has in many instances exceeded its tax collection targets but clearly with more effort and support from more stakeholders, more money can be collected.