Govt urged to fund ZRA adequately to enhance operations - PMRC
POLICY for Monitoring and Research Centre (PMRC) has urged government to support the Zambia Revenue Authority (ZRA) operations through provision of adequate funding to enhance its activities.
According to the PMRC Research and Analysis Division report, ZRA has achieved a number of milestones in tax administration attributing the successes to the changes in tax reforms.
The report stated that due to the changes in system updates such as the addition of Value Added Tax (VAT) as well as the introduction of online tax transactions (e-services), ZRA has effectively improved tax services on both parts of the customer and the government.
It noted that implementation of social- economic development projects in the country has escalated due to the increased contribution of tax revenue to the national budget.
PMRC stated that infrastructure development such as the construction of and rehabilitation of roads, schools, health facilities, provision of national security have been achieved due to increased tax revenue collection.
“The ZRA system has proven to be better than the previous tax system, in that it is more capable of capturing more revenue when the economy is doing well and has similarly recorded revenue declines during bad times when the economy is in a recession due to it being a semi-autonomous institution that uses modern management methods and often updates its systems,” the report pointed out.
It however indicated that ZRA has also lost tax revenue because of challenges such as lack of trained tax inspectors, thereby undervaluing property which leads to less tax revenue collected.
“Despite the ZRA having in place the taxpayer’s education and advisory services programme and taxpayer charter, many Zambians remain tax illiterate. ZRA needs to develop training and dissemination strategies in order to increase tax literacy, this could help bring basic understanding of the tax system and could encourage tax compliance
In addition, PMRC observed that most Zambians have low levels of tax literacy because ZRA has very little programs to enhance tax knowledge among taxpayers adding that the Authority further struggles with tax avoidance due to some loopholes.
Hence the report recommended that continued support both financially and materially is needed to enable ZRA increase capacity in revenue collection through implementation of various programmes.
“Despite the ZRA having in place the taxpayer’s education and advisory services programme and taxpayer charter, many Zambians remain tax illiterate. ZRA needs to develop training and dissemination strategies in order to increase tax literacy, this could help bring basic understanding of the tax system and could encourage tax compliance,” PMRC explained.
The Report further stated that it was inevitable to simplify the tax law to increase understanding and compliance and also strengthen the law on double taxation agreements to prevent tax evasion by multinational corporations