ACCORDING to the Income Tax Act number 33 of the Laws of Zambia, which gives the Zambia Revenue Authority (ZRA) powers to effectively collect tax income on behalf of the Zambian Government states that every income earned is subject to tax.
Today I will look at the transport sector and house ownership in the country to see the way this can contribute to the government coffers in terms of taxes.
The early 1990s marked the era of entrepreneurism in this country in the sense that the economic revolution slowly started shifting from state-managed enterprises to private-owned enterprises.
The liberalisation of the economy by late Former President Frederick Chiluba’s government opened the new era of economic dispensation triggering entrepreneurship in the real sense.
One area where entrepreneurship took effect was the transport sector.
As the state-owned enterprises, like United Buses of Zambia (UBZ), were being dismantled through privatisation, privately owned buses quickly took up the vacuum left by the parastatals.
Deliberately, the buses were allowed to be brought at minimum costs.
Today in this country the transport business has become so huge that bus, minibus and taxi operators have become part of the business empire
The vast business empire of transport may somehow be a source of income for the government if it applies its system of collecting tax in an effective manner.
Another budding business sector in this country which can be a source of revenue for the government is the untaxed revenue of house and building rentals.
The era of owning houses by individuals dawned when Dr Chiluba’s government offloaded housing stocks to the sitting tenants.
Since then many Zambians own houses and it is difficult to give general statistics as to who is paying tax to government over the houses that have put on rent since then.
The government through ZRA should not segregate in collecting taxes by targeting the obvious, but should spread its net wide to collect more revenue.
The government has embarked on several development projects and ZRA is expected to help in bringing in the revenue.
It is not good enough for the government to fill the gap of budget deficit by turning to borrowing when the tax authority has not exhausted the means of collecting the government revenue.
The operators for buses, minibuses, taxis and the individual house owners who have put their houses on rent are hard to pay taxpayers.
They equally pose administrative blockade to the taxi office and lack financial transparency that allows effective taxation by the government.
We know that government has passed the withholding tax law which allows the tenant to withhold a portion of tax from the rentals given to the landlord but how effective is this law?
A number of landlords throughout the country go unnoticed and the government loses a lot of revenue in this manner.
I feel that presumptive tax should replace withholding tax especially where tenants cannot withhold tax from landlords.
The withholding tax law applies to very few law-abiding taxpayers as otherwise the large taxpayers in this area are not paying withholding tax.
Coming back to the transport business I am aware that the government collect tax through the method of presumptive tax but how effective is this considering that no official statistics have been provided by the tax office?
The ZRA should be proactive in going into the unknown tax brackets to broaden the revenue base and apply the income tax laws effectively.
I remember by church pastor once said that, indalama shaba mubantu (meaning money is found with people).
This is the concept ZRA should adopt in looking at mandate given to it.
The Medium Taxpayers Office (MTO) and Small Taxpayers office (STO) in fact form the bulky of ZRA register.
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