The Kabwe Chamber of Commerce and Industry (KCCI) says the recently enforced law on withholding tax is going to have a negative effect on a lot of people, especially tenants.
KCCI Honorary Secretary, Leonard Shimwambwa, said this is because despite it being an old law, it has not been strictly enforced in a long time.
Mr. Shimwambwa told ZANIS in an interview that there is therefore need for the Zambia Revenue Authority (ZRA) to create awareness amongst the general public because a many people do not understand why they need to pay tax for renting a house.
“This withholding tax is not really new. It has been there for a long time and it is law. But what it is, is that it has not been strictly enforced and very few people know about it, so there is need to explain to the general public what it is about and why they need to comply,” he said.
He also said the fact that it has been pronounced at a time when people are facing many economic challenges, ZRA must be cautious and gentle in the way it implements the tax.
He added that there is already a housing deficit in the country adding that since many people are living in rented houses, there is need to create a rapport and engage the general public in order to harmonise the matter.
“I think there was some bit of a problem in the manner the tax in itself was introduced to the general public. It is like people just woke up and they were told that they needed to pay such and such a tax. What ZRA should have done was to engage the general public strategically and minimise the tax because of the economic challenges currently at play in the country,’’ he explained.
Mr. Shimwambwa said the negative effect of this particular tax is that the landlords will exploit their tenants by increasing rentals and that this will seriously affect the tenants because the entire burden is on them.
However, ZRA Inspector of Taxes-Central Region, Lloyd Chilufya, said the authority was working cautiously to ensure that there is mutual understanding between the revenue authority and the general public.
Mr. Chilufya said ZRA has been going round the community explaining the same tax since it re-enforcement of the law.
He said there has been great response from both the tenants and the landlords so far.
“We have been carrying out some door-to-door sensitisations in the communities and because of that, we have seen a lot of landlords and tenants alike, coming to either register or pay their tax,’’ he explained.
And another officer from ZRA, Musonda Kalenga, who is the Regional Inspector of Taxes and Tax Payers Taxes, expressed surprise that a lot of people are thinking that the withholding tax law was a new tax enforcement when it has been in existence for a long time.
Mr. Kalenga said the withholding tax is an old Act of tax and that it should not even be politicised because it has always been there.
He said the only problem is that a lot of people have not complied despite knowing about its existence.
“This tax has always been there but deliberately and unfortunately, just like any tax, a lot of people have not been complying, not because they do not know about it but because they do not want to comply,” he said.
Mr. Kalenga complained that it is typical of most Zambians to avoid paying tax and that it has always been difficult to get them to pay because they always want to be forced.
He however said ZRA will work with the media to ensure that everyone is made aware of the withholding tax adding that necessary mechanisms are being put in place to ensure that everyone is well-informed.
He has since appealed to the general public to also take keen interest in visiting the revenue office to enquire on various issues regarding tax compliance.