Smart invoice alone wont stop tax evasion-Expert

Economic Expert Maxwell Chungu has expressed concern […]

Economic Expert Maxwell Chungu has expressed concern regarding the growing tendency of shop owners to issue fake receipts or avoid issuing fiscal receipts, warning that the practice could be depriving the government of much-needed revenue.

Speaking in an interview with Zambian Business TimesZBT, Economic Expert Maxwell Chungu said the practice amounts to deliberate tax evasion as businesses seek to conceal sales and avoid paying taxes.

 “What we are witnessing is deliberate tax evasion because a proper receipt is proof of a transaction, and when a shop issues a fake one or avoids issuing one, they are simply hiding sales from ZRA so they don’t pay VAT and company tax, and in short, they want to make more profit by cheating both the government and the consumer,” he said.

Chungu said receipt fraud also creates an uneven playing field for businesses while leaving consumers exposed when they need proof of purchase for warranties or other claims.

“Government loses revenue that should go to roads, health, and education, while it also creates unfair competition because a compliant business that issues real receipts and pays taxes will look expensive compared to one that is cheating, and over time honest businesses are pushed out, while the consumer also loses because without a genuine fiscal receipt, you have no proof of purchase,” he said.

 He said the recently introduced Smart Invoice system by the Zambia Revenue Authority (ZRA) is an important tool but cannot independently eliminate fraudulent practices without effective enforcement.

“The Smart Invoice is a good tool because it captures sales in real time and sends them to ZRA, which reduces room for manipulation, but technology is only as good as enforcement, and if ZRA does not do frequent inspections and impose serious penalties, some shops will still find ways to beat the system,” Chungu said.

 Chungu called for stronger enforcement, greater consumer participation, and incentives that would encourage customers to demand genuine fiscal receipts whenever they make purchases.

“We need a three-pronged approach that includes stiffer enforcement through random ZRA audits, surprise checks and fines that hurt, consumer power through adopting a no receipt, no sale culture, and incentives such as a receipt lottery, which the government can consider to encourage people to ask for and keep receipts,” he said.

 He warned shop owners engaging in receipt fraud that the practice may offer short-term gains but could ultimately expose them to penalties, closure, and reputational damage.

“It’s short-term thinking because you may save on tax today, but you risk closure, heavy penalties, and a bad name tomorrow, and more importantly, you are undermining the same economy you depend on, so pay your taxes and issue real receipts because that’s how we build trust and grow together,” he said.

Article by Philip Sinkala