By JAMES MUYANWA in Washington, USA -
DOMESTIC revenue collection has become a key element of Zambia’s economy in short to long-term and the Zambia Revenue Authority (ZRA) says it is equal to the challenge as the chief public collector.
The authority posted a K500 million surplus on the cumulative target for the third quarter of 2017 and is set to collect above the targeted figure for the whole year.
ZRA Commissioner General, Kingsley Chanda said here that the domestic revenue collection would continue to be on – and in some instances – like this year, above targets.
He noted that local tax generation was key to the request for support from the International Monetary Fund (IMF) programme, to the 2018 national budget and to the Seventh National Development Plan (7NDP).
Mr Chanda who was in the Zambian delegation to the just-ended IMF/World Bank annual meetings here said the authority was ready for the challenge of increased target for next year.
“As ZRA we are equal to the challenge and for the third quarter of this year we have gone about two per cent or K501 million above the target.
“We are also confident that we will go beyond the annual target by December 31, 2017,” Mr Chanda said in an interview on the sideline of the meetings here.
Under the 2018 national budget the government has increased the target for ZRA revenue collection by about K7 billion while under the IMF engagement domestic revenue generation is key.
During the Zambian team’s engagement with the IMF, the fund acknowledged the level of the country’s domestic revenue generation.
Domestic revenue collection is also a key component of the five-year 7NDP’s effective implementation.
Mr Chanda said the ZRA would continue to build upon its 2017 achievement to deliver and was happy about the level of support from the government to the authority.
“During the year-to-date period, we collected K33, 884. 6 million in gross taxes while the refunds stood at K5, 342.3 million.
“The net tax take, therefore, stood at K28,543.2 million against Parliament target of K28, 042.9 million. The outturn was, therefore, K501.3 million or 1.8 per cent above target,” he said.
The positive performance is attributed to the Value Added Tax (VAT) collection which was K2.3 billion or 33.5 per cent above target.
Mr Chanda said for the 2018 national budget the authority was ready to meet the increased target and the heightened compliance level targeted.
In 2018 the government has tasked ZRA to raise the current tax compliance level from to 76 per cent and increase the actual collection by K7 billion.
Given the innovation and other measures which have been taken, the chief tax collector said the authority would meet the targets.
For next year, Mr Chanda said the ZRA would closely learn from its South African counterpart where some officers would be attached for about four months to learn about ways of collecting higher taxes and raise compliance levels.
He said that while in Zambia tax collection rate is about 18 per cent of the total Gross Domestic Product (GDP), the South African revenue authority collects about 27 per cent of the GDP every year.
“We want to learn how they manage to do that,” Mr Chanda said on the engagement with South Africa authority.