Minister of Finance Felix Mutati says there is need to address risks to the economy such as transit fraud, where goods destined for another country are offloaded in Zambia.
Mr. Mutati also says there is need to look into profit shifting through transfer pricing, where international companies are charging excessive management fees as a mechanism to reduce the tax component that they pay in a particular country.
Speaking when he officiated at the 6th African Fiscal Forum in Lusaka themed ‘Fiscal Policy in an Evolving World’, the Minister of Finance said African countries should share and minimize impact of these threats so as not to erode consumption taxes such as value Added Tax – VAT.
Mr. Mutati has also noted that Moodys’ elevation of Zambia’s economy from negative to stable is critical in boosting investor confidence as it is a clear indication that the Country’s economy is stable and will continue to grow.
Meanwhile, European Union Head of Delegation in Zambia and COMESA, Alessandro Mariani said infrastructure investment needs and social measures for the poorest in African countries are putting extreme pressures on budgets.
Mr. Mariani further noted that raising revenue collection, improving governance, reinforcing management capacities and spending better will help address the challenges.