A Lusaka based economist Trevor Simumba has said the deregistration of 1, 500 companies by the Patent and Companies Registration Authority (PACRA) will impact negatively on the growth of the private sector in the country.
He told ZANIS in an interview in Lusaka today that government should renegotiate tax incentives but never consider cancelling the bilateral tax treaties even in their attempt to safeguard the country’s tax revenues.Mr. Simumba also said government should review the entire tax structure to make it easier for companies to comply with tax regulations.He said it was imperative that the country’s tax system was clear, progressive and less costly as opposed to imposing undue restrictions on investors.
He said if the country’s tax system was not attractive, Zambia will not have a foreign direct investment that will generate the much needed resources for the country.Mr. Simumba urged government to introduce a flat tax system which he said was less cumbersome and cheaper to administer.He said if the country does not carefully manage the tax system, investors may run away and invest in other countries that have attractive tax regulations in place.
The economist further pointed out that government should be careful that it does not over regulate the economy because doing so would stifle the vibrant economic environment that has been created so far.He said it was important that the private sector was allowed to freely operate for them to create the much needed employment and generate wealth for the country.
And Mr. Simumba has said the deregistration of companies by the Patents and Company Registration Authority (PACRA) may damage the growth of the private sector.
He said the deregistration of 1,500 companies will have a negative impact on the level of economic activity, generation of government revenue and creation of employment in the country.
[ZANIS]
Too bad for the companies but the law is the law!
Said a hypocrite. And what is life, I asked. Is it now the a slave of this whip you call law? What is freedom if the law designed to create and protect it is obtuse and stifling? Laws were made by people, they should also suit them not just punish them, when are you going to foster creativity and growth, I agree with Mr Simumba, better adjust the tax system to suit local companies too.
PACRA need to introduce online submission of returns. This exercise is cumbersame year in year out
PACRA, economics is not politics. Put correctional measures not unilateral decisions. Also provide for online submission of returns as mentioned because we do not have time to queue up at the revenue authority office. We are busy ku Palauka for that elusive ‘mo money’ in the pocket.
Fact that they do not file returns implies that they are operating outside the ”web” of the economy. It is easier to evade paying tax and other statutory obligations if a firm is not captured by PACRA. Besides all businesses were given sufficient amnesty by Pacra to file returns or face De-registration and as is always they refused or neglected to do so. Pacra is therefore in order.
How are they out side the economy? They employ, buy, sell and provide services. Which means that PACRA is doing the right thing but going about it the wrong way. They should at least verify what companies are operating and at what level. And it is not these small ones that are messing around with tax avoidance, look to the hills where the big guns dwell.
There are many tax formulas that are used by different countries. Other than advising on how taxes should be structured the learned economist should be talking about all taxes can be collected through improving the tax system. Right now the tax system is so disorganised that some companies don’t disclose all their earnings or don’t pay tax at all.
Mr. Simumba should have first found out what kind of companies have been deregistered before commenting. The vast majority of these ‘companies’ are not even operating – let alone operated over the last few years. There will be zero effect on the economy.
They can easily re-register once they pay what they owe PACRA
With pf misuse of tax payers money for by-elections, i would rather avoid paying tax until 2016.
To my clients, do not mind me coming with newly created companies but the same face.
I didn’t know that, but it is a good thing I needed to know this before I said above, what the heck.Question: What is so hard about filing these returns?
Does anyone know why 1500 companies failed to comply with the law? Whichever way you look at it, that is a very large number. What is the total debt?
Bane! PACRA gave an amnesty to everyone to file their returns and 1,500 companies ignored them.
It’s like ZICTA which has asked everyone to register their sim cards. If tomorrow your phone goes TULULU, TULULU, TULULU bushe kuti wabutukila pakachulu and start condemning ZICTA? We must learn to keep updated statuory records in this country
Mr Simumba sounds like a stranger to Zambia. First of all, the tax system in Zambia cant scare investors, maybe he is talking of another Zambia. Secondly, these companies that have been deregistered are completely dormont, they exist only on paper, they do even know their obligations to file returns. People in Zambia just wake up and go to incorporate a company without understanding their obligations!
BA Trevor Simumba YOUR ADVICE IS TOO LATE AND THEREFORE INVALID. WERE YOU JUST WAITING FOR COMPANIES TO BE DEREGISTERED TO ISSUE YOUR COMMENT.
Mr Simusamba,of all the people.I don’t know if u had gone through all the factors b 4 writing.Dose cos. are not worth existing .No matter how we nid inverstment ilegality mustn’t b condoned.Moreover pacra gave them a long period amnesty.Bravo PACRA!
All the deregistered companies do not operate.There will be no loss to the economy.I know of a lot of people who register companies as families but keep papers for years without using them.Just go to Pacra and see how many companies are registered daily and you will conclude that the 1500 deregistered companies is nothing.I hope my company has been deregistered too,it has never operated from the time it was registered in 1998.All the other 3 sharehoders are dead and I dont even know where the certificates are.I wanted to start up another company with my wife last year but I couldn’t.Issues of the 1998 useless company came up.To have it deregistered officially,I needed to organise legal Administrators of the dead friends to sign papers which I failed.This is atually a blessing for me.
Simumba as an economist should understand the importance of tax revenues to the government. This habit of supporting illegalities in the name of freedom should not be condoned. when you register a company, you agree to all the responsibilities which comes with the registration and you cannot start to ignore them just because you want to operate freely. How do you expect the country to invest in infrastructure if companies are avoiding to pay tax.The Flat tax he is proposing will be regressive and the small businesses will be worse off. Imagine 2 small companies, one with K20 billion capital and the other K2 billion and the flat tax is set at K1 billion per year, which company do you think will survive? Progressive taxes are better , you pay on what you earn.
Simumba, you are disgrace to your family. Your analysis is a bit shallow for an economist, you should more than that.
“He said the deregistration of 1,500 companies will have a negative impact on the level of economic activity, generation of government revenue and creation of employment in the country”.
Some of these companies are just on paper. Next please
we would rather have 2000 complaint companies than have 40000 not paying tax. Economics we have in zed,