Business and Investment Consultants in Africa (BICA) […]

Business and Investment Consultants in Africa (BICA) Group has indicated that Zambia’s long-term revenue challenges will not be solved by imposing more taxes on compliant businesses and workers, but by bringing more individuals and enterprises into the formal tax system.

The call comes at a time when the Zambia Revenue Authority (ZRA) is estimated to finance about 80% of the national budget through domestic tax collections, making tax revenue the backbone of public service delivery and national development. However, despite Zambia having a population of over 20 million people, a significant portion of informal businesses, self-employed individuals, small traders and digital entrepreneurs remain outside the country’s tax net, leaving a small group of compliant taxpayers carrying most of the tax burden.

 Speaking in an interview with Zambian Business Times – ZBT, BICA Group Managing Partner and Registered Tax Practitioner in South Africa, Howard Mwape said Zambia’s biggest fiscal challenge is the narrow tax base rather than low tax rates. “The solution is not simply increasing tax rates on existing compliant taxpayers, but broadening the tax base by bringing more economic participants into the formal economy,” said Mwape.

He explained that an effective tax system begins with proper taxpayer registration, continuous taxpayer education and professional compliance support to help businesses and individuals understand their obligations. Meanwhile, Mwape proposed that Zambia establish a formal partnership between ZRA and accredited tax practitioners to improve taxpayer education, SME registration, filing accuracy and voluntary compliance.

“Tax practitioners should not replace ZRA’s regulatory role, but should complement the Authority by extending taxpayer support services throughout the country,” he said. Drawing lessons from South Africa, Mwape noted that structured collaboration between revenue authorities and professional tax practitioners has significantly improved tax compliance and reduced disputes with taxpayers.

“Expanding the tax base would create room for government to review the overall tax burden, allowing more citizens to contribute while reducing pressure on the same compliant taxpayers,” he said. Mwape also urged Government to accelerate the digital integration of ZRA with institutions such as PACRA, banks, mobile money operators and local authorities to strengthen taxpayer identification, compliance monitoring and service delivery.

He told ZBT that Zambia’s future tax reforms should focus on expanding taxpayer participation, improving education, embracing digital systems and strengthening partnerships with tax practitioners to build a fairer, more efficient and sustainable tax system capable of supporting long-term national development

Article by Phillip Sinkala