Deregistration of 1,500 companies may affect economy-Economist

A Lusaka based economist Trevor Simumba has said bilateral tax treaties were a necessary tool for attracting foreign direct investment in the country.

 

And Mr. Simumba said the deregistration of 1, 500 companies by the Patent and Companies Registration Authority (PACRA) will impact negatively on the growth of the private sector in the country.

 

He told ZANIS in an interview in Lusaka today that government should renegotiate tax incentives but never consider cancelling the bilateral tax treaties even in their attempt to safeguard the country’s tax revenues.

 

Mr. Simumba also said government should review the entire tax structure to make it easier for companies to comply with tax regulations.

 

He said it was imperative that the country’s tax system was clear, progressive and less costly as opposed to imposing undue restrictions on investors.

 

He said if the country’s tax system was not attractive, Zambia will not have a foreign direct investment that will generate the much needed resources for the country.

 

Mr. Simumba urged government to introduce a flat tax system which he said was less cumbersome and cheaper to administer.

 

He said if the country does not carefully manage the tax system, investors may run away and invest in other countries that have attractive tax regulations in place.

 

The economist further pointed out that government should be careful that it does not over regulate the economy because doing so would stifle the vibrant economic environment that has been created so far.

 

He said it was important that the private sector was allowed to freely operate for them to create the much needed employment and generate wealth for the country.

 

And Mr. Simumba has said the deregistration of companies by the Patents and Company Registration Authority (PACRA) may damage the growth of the private sector.

 

He said the deregistration of 1,500 companies will have a negative impact on the level of economic activity, generation of government revenue and creation of employment in the country.