THE 2015 National Budget has proposed stringent measures to enhance domestic revenue by, among others, stiffening sanctions for tax evasion, the Medium Term Expenditure Framework for 2015-2017 has said.
The ‘Green Paper’, which outlines policies for the 2015 Budget to be presented to the National Assembly on October 10 this year by Finance Minister Alexander Chikwanda, says sanctions for tax evasion are intended to enhance the disincentive of the vice.
The measure would also help guarantee that all economic actors recognise the negative effects of tax evasion and are compelled to fully meet their tax obligations.
Another measure would be the setting up of a multidisciplinary taskforce consisting of security wings and the Ministry of Finance to undertake spontaneous tax inspections to curb smuggling, illicit trade, under-declarations and corruption, particularly at border points and related tax malpractices.
“The current investigative mechanisms for tax fraud have proved to be ineffective and, therefore, this raises the need for more robust ways to curb these vices,” the MTEF states.
In trying to unbundle challenges hindering the growth of Small and Medium Enterprises (SMEs), which had led to a sluggish movement in the industrialisation process in Zambia, the Government would embark on the recapitalisation of strategic parastatal institutions such as the Development Bank of Zambia and National Savings and Credit Bank.
The step is aimed at facilitating the availability of cheaper financing in the domestic market and that it is Government’s intention, over the medium term, to institute deliberate efforts to protect the ‘infant’ industries.
The Government also plans to introduce specific measures to make locally produced goods more competitive, restrict ministries from importing goods that were manufactured locally. This would be achieved in conjunction with the Zambia Public Procurement Authority and the Ministry of Commerce Trade and Industry.
It would also be mandatory for Government projects, including those funded by loans or borrowing to have a minimum level of Zambian content in their materials.
The Government would also continue reviewing existing Double Taxation Agreements to ensure benefits of the agreements accrue to Zambia as well, and this would be done by aligning them with the current Government policy and changing global trends.
The MTEF projects that total revenues and grants would average 18.9 per cent of the Gross Domestic Product over the medium term.
Times of Zambia