USAID to conduct tax gap studies

EXTENSIVE tax gap studies of the corporate income, personal income, and withholding taxes are set to be conducted in the coming year by the United States Agency for International Development (USAID) to ascertain exact policies needed to close the breaches.

The studies will be conducted with a view towards quantifying the tax gaps and proposing policies and procedures to close identified gaps, according to USAID/Zambia Economic Governance Specialist, Salim Kaunda.

Mr Kaunda said this was one the initiatives meant to support Government in developing appropriate policies, strengthening regulation, and enhancing revenue collection from various productions such as the gaming and betting industries.

He said this yesterday in Lusaka at the 2023 national budget public symposium.

“USAID has been working with both the ministry and the Zambia Revenue Authority (ZRA) to examine the dynamics of the gaming and betting industry in Zambia, challenges faced by the industry, optimal ways of taxing the industry, and the social impacts,” Mr Kaunda said.

He also mentioned that under debt management, USAID Revenue for Growth reviewed and optimised ZRA’s debt management process (and operating model), including its alignment to global best practice.

Mr Kaunda explained that this resulted in, among other things, the improved overall effectiveness and efficiency of the tax collection process.

He stated that the USAID Revenue for Growth had therefore supported the ZRA in an initiative that resulted in the collection of K8.7 million in unpaid taxes.

Mr Kaunda explained that USAID Revenue for Growth project was also committed to supporting the government’s agenda to engage non-state actors in the formulation of tax policies and tax administration procedures.

“USAID Revenue for Growth has conducted, and will continue to conduct, initiatives to provide a platform for nonstate actors to discuss tax issues.

“We will also continue to build the capacity of non-state actors in conducting economic analysis, advocacy and other areas to enhance their effectiveness in discussing tax issues and developing evidence-based tax proposals,” he said.

Mr Kaunda commended Government for its extensive efforts to solicit proposals from the public during the budget process, which USAID Zambia had witnessed first-hand.