The Zambia Revenue Authority (ZRA) has recorded a deficit of K573.9 billion below target in revenue collected between January and September this year.
ZRA Commissioner General Chriticles Mwansa said the tax revenue out-turn largely due to on account of poor performance in trade taxes adding that this was lower than the projected revenue collection in terms of trade taxes
He said in the period under review ZRA collected K8, 717.5 billion in gross taxes while the refunds stood at K1, 644.9 billion, net tax gobbled K7, 072.6 billion against a target of K7, 646.5 billion.
Mr. Mwansa said this in Lusaka today in a speech read on his behalf by ZRA Commissioner for Domestic Taxes, Wisdom Nhekairo.
The Commissioner-Gen. noted that the world financial crisis contributed to the rapid depreciation of the local currency the Kwacha against other major currencies during the first quarter of the year which resulted to slowdown in cost importation in economic activities in the country.
Mr Mwansa said in a bid to mitigate the impact of the global financial crises on trade taxes, the Authority set up measures that increased audits of the Taxpayers’ accounts in different key sectors of the economy.
He explained that the audits enabled Authority to improve revenue collections from inland taxes, a situation that is more dependable and sustainable for the nation.
The however discloses that the Authority has embarked on vigorous mining audits to ensure that they maximize revenues including taxpayers’ accounts in different sectors of the economy.
The Commissioner General added that these audits are aimed at verifying the compliance with the tax regime and validating the cost structure of these sectors that are being audited.
Mr Mwansa said the Authority commenced its pilot audits in February this year for three major mining houses in Zambia with a technical assistance of the Norwegian government.
He added that the last phase of these audits commenced last week and it is expected to be completed by the end of November this year.
The mining companies being audited are Mopani Copper Mine, Konkola Copper Mine (KCM) and Kansanshi Copper Mine respectively.
The Commissioner however, said during the review period ZRA intensified audits for small scale mining companies involved in gemstones, quarrying and those dealing in base metals to ensure comply with payment of mineral royalty.
ZANIS
Yet acertain Mr Capitalist comes up with his trash GDP!
well done guys hope by the end of the year you will have recovered. By the way the figure is small.
Small? K574 billion is small? Typical!
The problem with the tax base in Zambia is that, ZRA cannot maximise on taxes involving land and property, people sale their homes howevr they want, without any revenue going into government. This should seriously be looked at, capture those taxes, you will see how you will improve and avoid defecits. Welld one though!
Ba Mulenga, bushe ninshi mwalifumyako Property Transfer Tax shino nshiku?
# 4 Mulenga,ZRA actually collects Property Transfer Tax.Before ownership is changed ZRA issues a certificate so your concerns are actually taken care of.The problem is weak Musokotwane,the abolishment of windfall taxes was myopic,that tax was self regulating based on profits,now this muzungu anikonde attitude the country is losing revenue
Muzungu anikonde is killing Zambia, and White people don’t care, as most of them are so greed , they continue to rob people. They bank laundered money….in their Banks here , even when they know that it is coming from poor countries. Google ” economic hitman” people and see what goes beyond the curtain those donor money u get. The international committee can’t set rules that protect third world countries from been robbed.
Mulenga – # 4, u are right on the point of tax base in Zed. This is very narrow and is politically manipulated. Billions of kwacha exchanges hands at Buseko and Chisokone and yet these are no go areas for the taxman. Tax education is very important. Remember at one time ZRA’s motto was ‘Get the benefit of paying’? They quickly changed because people actually dont see the benefit but see it being wasted on unnecessary trips abroad by politicians. I know it is catch 22 – people want social amenities from GRZ but the amenities can not be provided unless people pay taxes. There are only 500k people in formal employment in Zed paying taxes (80% of whom are govt or quasi govt – i.e little value addition to economy) against a population of over 11million, how do you expect a country to…
If you are to read the 2010 budget and analys it seriously, its another deficit budget which does not offer hope to poor Zambians. Any budget must heavily tax the rich and distribute to the poor but in Zambia it has become traditional to heavily tax the poor to fatten the rich pockets. One relief was the introduction of windfall taxes in the mining sector and today the mines have bounced back to business and we losing lot of money because of what Banda Bwezani did by doing away with windfall tax. So what deficit is my man Criticals talking about. What we have done is to stop importing vehicles and they have no where to tax us. Reorganise the tax regime and don’t rely on one.
criticles mwansa has stayed at ZRA for too long, is it a family business? can we have someone else come in and make changes/fresh ideas
But critoris oh criticals what are gonna do about collecting more taxes??
i love his eyebrows
Goodmorning
I’m not an economist but the explanation that “revenue collections from inland taxes is more dependable and sustainable for the nation” is rather controversial to me. How can you count on the poor people’s low income to supplement for the huge deficit in trade & taxes?
Corruption is the reason!!!!!!!!! Starting with you C. Mwansa to Rupiah Banda
……and yet most of these Customs chaps have built serious masions without having obtained loans from institutions,where are they getting this money from…..? Customs/ZRA workers are untouchable in our communities – God help us nindalama shesu shonse they are showing off.Thats where the money has gone!
with the foreign groups it will be imposible to receive the normal taxes !
These group no give dividends to ZCCM-IH who hold between 15 et 20 % in each mines…GRZ and the board of ZCCM-IH never talk about it… with help from some corruptible mens it’s to easy for these groups
Now how do you want foreign groups give taxes to ZRA ??
unfortunately corruption is more and more important in zambia…
WATCH UR GRAMMAR AND ENGLISH LT. TOO MANY ERRORS.
Mr Mwansa consider broadening the tax base by reducing the requirement for VAT registration.In this way there will more businesses in the formal sector as opposed the the current stuation.Rwanda has done it.This is good for both ZRA snd informal sector who cant access govt procurement and other formal benefits.
Municipality siumvela.Wanisekesa bad.Naenda na ku lecture.
My guess is that the difference was pocketed by the corrupt employees!
The ZRA deficit is very huge for a poor country like Zambia. It is the first time in the histrory of the ZRA that there has been a deficit. Mwansa has failed to perform his duties and should be relieved immediately. Even in the midst of the world economic downturn, other revenue means can be developed. But Mwansa lacks the capacity to initiate more revenue means but only relies on traditional ways, such as, PAYE, Customs and Excise, VAT. Surely a more creative person can think of more ways of collecting other sources of revenue, such as, taxing the informal sector, which could have made up for the deficit. Further, as #20 says, there is still too much corruption in ZRA, which has increased unabetted under Mwansa. Can RB please bring in a new ZRA CG, one who is intelligent and creative.
Maybe they should think of a tax that each African on the continent should pay to the ZRA! Otherwise there is no way out of such huge amounts.
The shortfall is in relation to a set target. Why didnt they adjust the target given the global recession. Change the targets.
#21 Patriot you are right. We need to broaden the tax base. Peharps we should judge our CG by how much he has broadened the tax base. E.g tax the informal sector which has more participants than the formal sector. Also find a better and more effective way of taxing Asian businesses. Ba mwenye don’t want to pay tax where ever they live, even here in the UK they do whatever they can to avoid tax. To them, it is a crime to pay tax. That’s why in Zambia they keep millions of cash at home. KK used to catch them when he changed ZMK currency notes. They used to come out with bags of kwacha. Criticals should tax these chaps, they make loads of money but pay little…
Ba Mulenga has a point. Property Transfer Taxes at 3% are ridiculously small. They could charge twice that. And secondly, Zambia has no Capital Gains Tax and no Inheritance Taxes so bafinondo never get taxed whereas the poor guy has to pay PAYE. I would suggest the increase and introduction of these taxes, the abolishment of PAYE for persons earning say less than K10m per month and the increase of VAT to 20%.Â
#s 10 & 21 – I do not subscribe to your comments about ZRA CG. Chriticles is one of the most experienced tax managers in the country and has international exposure. Remember that he was serving as a Director at WCO when he was recalled by late President Mwanawasa who appointed him as CG? ZRA simply implements policies and the policy formulators are the govt. As long as you elect dull MPs like GBM u wont go nowhere as a country.
Concerning Customs officers, I believe it is the importers and the travelling public who make them corrupt. Next time u are importing anything and u are given the bill why not just pay without trying ‘negotiating’? Pipo have a misconception that ZRA isextortionate and therefore u have to bribe the officer for a better bill!
Surplus or deficit no difference so why the big deal.
#25 I support you, you see that is the problem I have with us bloggers, we just blog without being well informed, you raise good very good argument, I appreciate that, I for one believe Chriticles is doing a damn good job at ZRA, and you are 100% right that legislators make the law and policy is onlyy implemented by these offices. The more reason to have parliamentarins that understand and are able to comprehend the meaning of the legislative position, keep voting for Kaponya’s and well you will see more defecits, and lack of properly managed revenue offices, this country is in serious need for educated an well informed people!
#6, the issue is not whether it has been covered but whether in actual fact these laws are been implemented. If you looked at the number of properties mushroooming in Zambia, and the continued exchange of ownership of such property, you will begin to understand the magnitude of revenue that is not being captured in the system. So if a law exists but is not implemented, what use is it I ask you?
Our country is poor because we do not move with time. Expand tax base Ba Mwansa. Theres alot of bucks uncollected , what you collect is just a fraction. How many Landlords are in Zambia? How many pay WHT? Beniko serious perhaps naimwe tamulipila WHT . How many self employed people pay taxes in Zambia? We do not have a system to track our own citizens can we track taxes? NO. Lets get back to the drawing board, set up a National Database through provincial centres. It may be costly now but its worthwhile for posterity. We can do it.
He was there supporting RB and Musokotwane that its good the winfall taxes were removed and we dont need them see it now below the target. We can see the difference of LPM rule ans now. With LPM it was always getting to the target and above the target. Taxes are what help build an economy and a country.
# 15 You are being petty and jealous Those guys employed by ZRA in customs division are heavily monitored by the system. Its just a quebeing serious prident with the way one manges his/her resources. Days are gone when pipo used to hide money in tins and burry fear of being visited by then feared SITET during UNIP era. Now men and women under 30yrs are doing much better than same age group 20yrs ago. Its a matter of avoiding chimbwe no plan mentality. As for ZRA failing to meet revenue collection target by K573.9BN. this was expected as a result of letting the mining companies not paying enough Tax. The companies are making huge amounts from sales of copper and bring back to Zed just for their operational costs. They should be campelled to bank all revenue locally. They are giving lito
#25 I beg to differ with you on GBM, he is not dull as you think. First consider by any Zambian standards, the kind of investment he has, very few come close if you dont consider plunderers, whereas Criticles has an empire in ZRA, most of guys especially in customs division, those operating at border posts are his henc…..