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ZAMBIA'S CURRENT TAX REGIME NEEDS A COMPLETE RESET- PART 1 15th March, 2024 Taxes in Zambia have killed real possibilities of both human and economic prosperity, locking the country in a gruesome economic headache for any Government. A critical rethink of Zambia's tax regime to unlock our country's fullest potential must be embraced and centered on how we successfully restructure 3 components of taxation: 1. Personal taxes/ pay as you earn (paye) 2. Corporate income tax/ Business taxes 3. Tax treaties 1. Personal taxes/ pay as you earn-PAYE PAYE is levied in the range of 25-35%, the maximum rate applicable to farmers is 15%. It is extremely nauseous that Zambian workers continue to pay more taxes to the fiscus/treasury than all the companies put together. Recent progressive economic narratives have actually revealed that low personal income tax such as PAYE; a) Increases consumer spending due to increased household disposable income. Modern economies grow by consumers spending. b) Contribute to the reduction of local households poverty and crime rates in communities. c) Increases government tax revenues as perceived loss of revenue is recouped through multiplier effect of local job creation. d) Contributes to low prices of goods and services as businesses do not overcharge to make profits. e) Enables local households to build capital for investments creating generational wealth for families. For a Nation to heavily tax its own workers into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.- Winston Churchill (paraphrased). It's time to get our taxation right for our people if we are going to accelerate both human and economic development as a Nation Silavwe Jackson President GPZ PS: Watch out for Part 2: Corporate income tax/ Business taxes

WHY MUST GOVERNMENT BALANCE TAX POLICY AND PRIVATE SECTOR DEVELOPMENT? Balancing Tax Policy and Private Sector Development is significant for several key reasons: 1. Economic Growth: Effective tax policies are crucial for funding public services and infrastructure without overburdening businesses. A balanced approach ensures that the private sector can thrive, contributing to overall economic growth and job creation. When GDP is growing, the government can then tax larger proportion of the GDP. 2.Fairness and Equity: A balanced tax policy ensures that all economic actors contribute their fair share to national development. This promotes equity and reduces disparities between different sectors and income groups. There is no more tax burden on the formal sector only. Everyone pays some. 3. Government Revenue Stability:: A balanced tax policy helps stabilize government revenue by creating a predictable environment for business operations, which in turn leads to steady revenue from taxes. REGISTER TODAY! JOIN THE DISCUSSIONS Gordon Dardey, FCCA,CA,MCIT Ghana Revenue Authority - official ABENA OSEI-ASARE African Development Bank Group International Monetary Fund

The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele has suggested that Nigeria has the potential to increase its revenue without resorting to tax hikes that could negatively impact the economy. Says, Nigeria is a poor country with the potential to be a wealthy country. According to his perspective, by harnessing data, intelligence, and technology, Nigeria has the potential to bridge the tax gap by prompting individuals who have previously not been contributing to taxation to start doing so. He believes that the current tax system is not yielding the desired outcomes. He said, “Certainly, you know the whole idea is that we have done whatever we are doing now for decades, and it hasn’t produced the right result. “We have over 60 different taxes and levies, but we are barely even collecting enough money to fix roads. “By the way, the entire budget, that’s the federal government’s, is about N29 trillion plus all the states in Nigeria, which is about N15 trillion. If you add it all, it comes to about N44 trillion. That’s around $30 billion.  “That $30 billion is even less than the budget of Kenya, which is around $32 billion. It is barely a quarter of South Africa’s budget at $130 billion. And of course, it’s even less than the budget of New York City, not even just New York State. So, Nigeria is a poor country with the potential to be a wealthy country. “So, we do believe, based on the analysis we have done and the data available to us, that the right way to go is not to introduce more taxes. And, if you are going to raise the rates of any tax, it has to be something that we’re doing as a result of the consolidation and harmonisation. “We do think that having fewer taxes is broad-based, easy to collect, and does not place a burden on the bottom of the ladder of society is the way to go. “And by using data, intelligence, and technology, we can close the tax gap so that people who have not been paying before begin to pay – who have been identified as people who should be paying – and the poor people should be legitimately exempted, particularly micro-businesses and low-income earners.” #GodBlessNigeria #MayTinubuSucceed

📢 #NewPublication: Understanding the Potential for Property Tax Reform in Zambia   Improving Zambia’s property tax system has the potential to transform local government finances. This policy brief, authored by Regan McCort, Graeme Stewart-Wilson, and Nicolas ORGEIRA PILLAI, identifies key constraints such as incomplete property discovery, costly valuation, and rigid rate-setting. It also provides actionable reforms, including delinking property taxation from local planning and enabling automated valuation models.   Policymakers in #Zambia and beyond can learn from this case study to improve local revenue collection equitably.   🔗 Read the full policy brief here: https://bit.ly/3Y6go6e #LoGRI #Tax4Dev #LocalRevenue #PropertyTax International Centre for Tax and Development

TAX REVENUE OF THE THREE BIGGEST ECONOMIES IN AFRICA AND THE REVENUE POTENTIALS OF NIGERIA. Nigeria has the biggest economy in Africa with a GDP of $477 billion as at 2022, which is followed closely by Egypt with a GDP of $475 billion and South Africa with a GDP of $405 billion. The size of an economy is measured by the monetary value of goods and services produce in a country over a period of time, which is usually one year. A High GDP is therefore an indicator of a vibrant economic activities in a country. This should ordinarily translate to “high” tax revenue; (high here, is relative to the percentage of GDP), especially from top-line taxes (taxes that do not take cognizance of costs incurred in generating revenue) but in reality, it is not actually the case. Highlighted below are the tax revenues from the 3 biggest economies in Africa. Nigeria (FIRS) generated N10.1 trillion ($11.3b) 2022 FY; and in total all revenue generating agencies generated N15.1T ($16.9b). Egypt generated N44.0 trillion ( $49b) 22/23 FY. South Africa generated N 83.8 trillion ($94b) 22/23 FY. The data above highlights the tax revenue gaps that exist within the Nigerian tax system and the potentials that lies within the economy to generate the much needed revenue through taxes as against borrowings. However, taxes should be imposed in an equitable, efficient and sustainable manner, in order to support the programs and developmental plans of government. In addition to the recommendations already made by the Presidential Committee on Tax Reforms and Fiscal Policy, here are a few more: -The tax authorities should consider embarking on a nationwide tax education and sensitization of taxpayers - Government must demonstrate prudence in the management and utilization of public funds - Government must encourage voluntary tax compliance, which is more advisable as it is more cost effective than tax enforcement. Finally, Tax is a social contract and it is about the people; and so, the government must hold on to its end of the contract by considering the people more in the policies and programs of government. #taxrevenue, #firs, #finance #nigerianeconomy #taxreform

In recent times, Nigeria has witnessed a surge in taxation efforts, with little or no significant impact on the informal economy, especially those in Northern Nigeria. As the government strives to broaden its tax base and boost revenue, it's essential to examine the effects of these measures on the informal sector. The informal (shadow) economy, valued at N40,181.29 billion in 2019, encompasses unregulated and untaxed economic activities. This sector is largely characterized by unregistered businesses, small-scale farmers, and nomadic communities. These groups often operate outside the formal tax system, making it challenging for the government to track and collect taxes. We can work on these issues; by implementing tax reforms that simplify and reduce tax rates, making it easier for informal businesses to formalize and comply with tax laws. Also, by introducing fiscal policies that provide incentives for informal businesses to register and operate within the formal tax system, such as tax holidays or reduced tax rates for newly registered businesses. In 2023, Tax for SDGs made significant headway, signing a total of 22 Country Engagement Plans (CEPs). Through the CEPs, the Tax for SDGs supports governments in addressing tax avoidance, tax evasion and other illicit financial flows, particularly through technical assistance and cooperation facilitation. While this is commendable, the implementation must be carefully considered to avoid disproportionately affecting the informal economy. Moreover, digitalization efforts, such as the introduction of electronic invoicing and online tax filing, may exacerbate the challenges faced by informal businesses, which often lack the necessary infrastructure and technical expertise. At NTS 1.0, organized by The Tax Club, Ahmadu Bello University, Zaria, we aim to delve into these pressing issues and explore practical solutions to promote a more inclusive and sustainable tax system for all. #tax #firs #symposium #taxation

#Increasing Tax Revenue in Nigeria: A Call to Action Nigeria's low tax collection rate is a significant challenge to the country's ability to finance critical sectors like health and education. Bill Gates and other experts have emphasized the need for Nigeria to increase its tax revenue to improve its fiscal health and invest more effectively in public services. This position paper outlines the key takeaways from Gates' remarks and provides recommendations for Nigeria to address its tax revenue challenges. Key Takeaways: 1. Nigeria's tax collection rate is insufficient for meeting the essential needs of its citizens, especially in healthcare. 2. Increasing tax revenue is crucial for improving Nigeria's fiscal health and investing in public services. 3. The current tax system is ineffective and needs reform. Recommendations: 1. Implement tax reforms to increase revenue collection. 2. Improve tax administration and reduce corruption. 3. Increase transparency and accountability in tax collection and utilization. 4. Implement policies to reduce tax evasion and avoidance. Conclusion: Increasing tax revenue in Nigeria requires a commitment to reform and transparency. We urge the Nigerian government to take action on these recommendations to improve its fiscal health and invest in critical sectors like health and education.

VAT INCREASE, THEN WHAT NEXT? The saying, “Don’t kill a willing horse,” reminds us that there is only so much strain that can be placed on people already bearing heavy burdens. As part of the government's broader tax reforms, the proposed VAT increase from 7.5% to 10% by the Presidential Fiscal Policy and Tax Reforms Committee, chaired by Taiwo Oyedele, rather than streamline tax administration, risks, adding even more strain to the economy and its citizens. While increasing revenue is important, the real challenge lies in cutting the high cost of governance and addressing the extravagant lifestyles of public officials, which have long drained national resources. Without a focus on accountability, raising taxes becomes a short-term fix that will not lead to lasting progress. Despite recent increases in government allocations, the average Nigerian’s living conditions have shown minimal improvement. Emphasizing the need for a stable, strategic approach that encourages long-term investment and sustainable growth, what Nigeria needs now is not higher taxes but a creative, forward-thinking mindset—one that moves beyond conventional solutions to address deep-rooted economic issues. Sustainable, long-term solutions are far more effective than simply raising #revenue through #taxation. This administration has introduced numerous changes in the last 17 months. While some may be necessary, frequent and uncoordinated shifts erode public confidence, create confusion, and ultimately lead to resistance. Effective Change Management should be anchored on empathy and collective responsibility to be successful. It’s concerning that the House of Representatives is pushing the VAT increase with such speed and determination. Does the House truly believe that increasing #VAT will ease the burden on struggling citizens, improve productivity, reduce inflation, or create employment? Is more taxation really the solution to our economic challenges without a deliberate and long-term #strategy for sustainable growth? Rather than focusing on tax increases, the House should prioritize more critical issues—reducing wasteful government spending, creating an enabling environment for businesses to thrive, ensuring equal opportunities for citizens, and strengthening anti-corruption measures. Recent policies have been reactive, lacking the foresight for meaningful, lasting change. Endless policy shifts are not the answer. We need sustainable policies that foster real economic development, enhance accountability, and cut wasteful governance. Only then can we address the deeper issues and restore confidence in Nigeria’s economy. #EconomicGrowth #SustainableDevelopment #Accountability #AntiCorruption #NigeriaEconomy #TaxReforms #PublicTrust #InvestorConfidence #LongTermGrowth #LeadershipMatters #Productivity

The International Monetary Fund (IMF) has criticized Kenya for handing out multiple tax incentives and exemptions to the ultra-wealthy and large investors in the past decade, which has undermined Kenya's ambition to grow revenues. Kenya's tax-to-GDP ratio has been on a downward trajectory since peaking in 2014, and the IMF has called for the reversal of measures narrowing the tax base, starting with the implementation of the Medium Term Revenue Strategy (MTRS). The drag on tax revenues is likely attributable to the incentives granted to the rich and large investors. “Kenya needs to strengthen tax collection consistent with the authorities’ objectives of sustained increase in tax revenues to meet their development agenda. In this regard, a key milestone is the timely adoption of Kenya’s first MTRS which aims to increase revenues by five percentage points of GDP by FY2026/27 through measures that broaden the tax base and strengthen tax compliance,” the IMF added. Read More: https://lnkd.in/d_QwuEsh

2025 Zambia National Budget Highlight: A focus on Value Added Tax (VAT) The 2025 Zambian Budget places a strong emphasis on domestic resource mobilisation, with a significant 22.3% allocation to VAT. Against this backdrop, this tax type had no compensating measures in this year's pronouncements. While the focus remains on housekeeping measures, the administration of Electronic Invoicing stands out as a key development. The budget brings both clarity and relief, but also raises concerns with the increased powers granted to the Commissioner General. The highlight below showcases the key VAT changes, noteworthy business impact and strategic recommendations to be considered. Stokely M. Towera Temba-Nkanza FCCA, ZICA Patrick Zimba Mawire, FCCA, FZICA, ACA, CTA (SA), M Com Tax John Sakala. MBA, FCCA, FZICA, BEng CE (Dist) Mark M Libakeni Everisto Mwalubulo Makusi Nyirenda Muzumbwe Chinganya #EYBudgetAnalysis #ZambiaBudget2025 #VATHighlight #EconomicGrowth #TaxReform #ElectronicInvoicing #DomesticResourceMobilisation