Friday, March 29, 2024

Zambia signing its way out of tax revenues-ActionAid Zambia

Share

ActionAid Zambia Acting Country Director Harriet Robina Gimbo
ActionAid Zambia Acting Country Director Harriet Robina Gimbo

A new report from ActionAid titled ‘Mistreated’ released this week has revealed that Zambia has 13 restrictive tax treaties that dramatically restrict the government’s power to tax global companies doing business on our soil and therefore unfairly limit our country’s potential to collect tax revenue.

The report also found that around the world, poorer countries are losing billions in revenue thanks to treaties that stop them taxing multinational companies.

The ‘Mistreated’ report is based on ground breaking research that has for the first time examined 3,000 international tax treaties, revealing which ones take away poorer countries’ ability to raise taxes on multinational companies.

ActionAid Zambia Acting Country Director Harriet Robina Gimbo said, “All national resources that can be mobilised behind the fight for development should be explored.”

She added, “Outdated and unfair treaties make it possible for multinational companies to potentially significantly reduce the tax they pay in Zambia. Women and children in poverty pay the price when crumbling with poor or no public services like schools and hospitals often starved of possible funding’’

ActionAid Zambia is now calling upon the Zambian government through the Ministry of Finance to urgently revise the very restrictive tax treaties that Zambia currently has in force, due to the potential for multinational corporate tax avoidance and the resulting negative impact on the country’s national budget and subsequently public services.

ActionAid says the funds that are lost through tax avoidance are desperately needed to pay for our schools, hospitals health and other infrastructure, and to sustainably and democratically fund the long-term fight against poverty and inequality adding that when these services do not exist, women and girls suffer the most.

It said Tax treaties play a facilitating role in many of tax avoidance schemes used by multinational corporations to reduce their tax liability and have played an enabling role in most well-known cases of aggressive tax planning by large companies.
ActionAid stated that Tax treaties open up opportunities for treaty shopping and sometimes facilitate double non-taxation.

“In addition to reducing overall tax paid by multinationals, the division of taxing rights created by tax treaties between higher-income and lower-income countries is often not fair. The International Monetary Fund (IMF) and the Organisation for Economic Cooperation and Development (OECD) have both acknowledged that this is a major problem for developing countries,” it said.

The study found that Zambia has restrictive treaties with the following 13 countries and should urgently consider revising them; China, Denmark, Germany, Ireland, Italy, Japan, Mauritius, Netherlands, Norway, Poland, Seychelles, Sweden and United Kingdom.

ActionAid said these tax treaties should go through immediate review, subjected to regular impact assessments, taking into consideration development implications of these treaties and ensuring that the negotiations are a transparent and inclusive process, open to public and civil society scrutiny. We consider the United Nations Model Treaty a useful minimum standard for these negotiations.

27 COMMENTS

  1. Such articles remind me of knowing as black people we remain inferior to whites

    It hurts but its true

    I know it and you know it but you wont admit= why?

    If it is not white it is not right

    I hope MS is the president in august
    Thanks
    2014

    • If you white, its alright.
      if you yellow, you are mellow,
      if you are brown, stick around.
      if you are black, stay back.
      Umusungu temunobe. They have never menat well for our people. the sooner we understand this, the better for us. Ati Ambassador schultz, ifyabupubafye!!!!
      And our so called educated elites are still signing these treaties. Ati the president was in france where he signed some trade agreements and you think the whites really want to help you kanshi mawe, they know they will get more than the benefit we think they will bring. Lets trade amongst ourselves as africans. lets put money together and do projects in our countries beneficial to us all as africans.

    • This is not only a problem in Africa. These multinational companies have a specialty in finding loopholes to pay as little taxes as possible on their profits. If you take your time off politicking you will know by now that companies like Apple, Google, Amazon, Starbucks to mention but a few, pay measly tax percentages in the UK and USA compared to an ordinary person like me.The USA and the U.K. have been trying to tax these companies what they ought to be taxed but guess what, there is nothing illegal about what these companies are doing. Therefore, USA and UK governments are toothless. These multinational companies set up their corporate headquarters in tax havens.
      True something needs to be done about this but it’s not exclusive to Africa or Zambia in particular.

    • @Ndobo, where is Pamela-Softex Chisanga, were you serious about sending her on maternity leave? Or is she preparing as running mate to Edgar?

    • But it’s HH who colluded with MMD govt to help protect interests in the companies he had received shares or cuts.

    • That is what we get when a totally clueless old dinosaur fossil is appointed Minister of Finance by an iddiiot like Sata just because he is his UNCLE!

      And a drunkard Lungu keeps him because he has zero idea about National finance!

      PF had a chance to do something right but they have thrown it away with their arrogance and sttupidity. All Chilkwanda knows is BORROWING.

      Leaving our children to fix his mistakes@

  2. We know this, but Zambia seems to be caught in a web of Western Investors who mean to take it all. We have not much bargaining power when we need to make urgent financial agreements to get our economy in line during bad market condition. We have more power to resist if the market conditions are favourable.

    • This is a hard one. Which is better – PF getting more taxes so that Lungu can be flying his prostitutes to NY, Vatican and Paris or letting First Quantum take the profits to Australia? The bottom line is that the more money these politicians have the more they want to stay in State House First even when they are terrorising citizens.
      #ChagwaMustFall

  3. I see protests in western countries over these matters but to be fair it is not fully understood locally on the ground. The only protest in sight is a political party going after diplomats when their leaders beg the same for aid behind closed doors.

  4. The biggest problem we have is that we sign these treaties without understanding or reading through them. We always want to please a white man by signing a lot of treaties yet whites know that our reading culture is very bad. Even our technocrats only read the first and last paragraphs then recommend to powers that be. What a shame!

    • That’s not true. The gov’t is under duress as they cannot get the money any fairer. These multinationals are vultures who will take it for Fred if they can.

    • Spot-on. But whether those we entrust with the solemn responsibility to take good care of such matters fail to do so by design or otherwise – kickbacks / commissions perhaps – is another aspect worth considering, I think.

  5. An eye opener. What next? Talk and talk and talk and talk until an important research is reduced to the ‘we-know-attitude’ which has never helped our country.

  6. Do we have muscle to fight that? Are we the only country with what those investors want. Good idea but needs to handle with care. Lets go for kaseba as lungu’s running mate to avoid division in PF. Fr Chilinda and KK pliz help by talking to her and lungu.

    • But Kaseba is the widow denying inheritance to shameful and irresponsible Sata’s other children, having died intestate like most Zambian men. Why should someone like that be deemed a good running mate? It’s just boring and old hat to repeat all these things. If capable Nawakwi can’t master enough votes on her own how will such +1 bring in big Voting numbers! PF Lungu needs to be very careful.

  7. patriotic@ women are always like that when it comes to men. I apreciate that we should manage our emotions. pliz my dear kaseba is lesser devil than Edith.

  8. All we need to do is control our own resources. Let’s provide for Zambian/African policies that benefit us and not these muzungus!!
    Ati Mugabe is bad, my foot!! African needs at least 40 Mugabes. Blacks, let’s stand up to the white man’s injustices.
    Stop the yes bwana mentality for the good our future generations

  9. This report is not a full evaluation of development impact of taxes. There are two options: either the government collects taxes (most of which end up in pockets of the corrupt politicians and public servants), or allow less taxes and let private companies operate creating jobs and undertaking other social responsibilities. Of course in the latter scenario, the criminals change: it is the corporate owners and managers, who also collude with dirty Politian’s to extort the poor. So, ActionAid should be looking into solution that ensure the poor people are not take advantage by public servant criminals or criminals managing these corporations. It is a big issue of governance in either the public sector that collect taxes or the corporate that makes profits.

  10. Zambia signing on to slavery once again courtesy of clueless PF who have turned 180 degrees on their campaign promise of more money in your pocket to “less money in our treasury”

  11. @Muntu… A brilliant observation and timely advice. The problem as you rightly note is, how do we avoid falling into either of the two pitfalls?

  12. There are too many people on this forum who think that only the government is corrupt, and let’s leave business alone. Well who do you think is doing the corrupting? That is Anglo-American De Beers, GlencoreXstrata, Vedanta, Rio Tinto…

    Just google: glencore globalwitness

Comments are closed.

Read more

Local News

Discover more from Lusaka Times-Zambia's Leading Online News Site - LusakaTimes.com

Subscribe now to keep reading and get access to the full archive.

Continue reading