Zambian tax collection: an all too common tale
He said that Zambia Revenue Authority will not recover the ZMK 8.3 billion mining royalties’ deficit by the end of the year because it has no competent staff to handle the mines. . . . the mining companies as far as am concerned (sic) are transfer pricing, there is also rampant tax evasion and ZRA are not up to the mark to audit the mining companies books so that they can have a realistic assessment of what is due.And so Zambia has to go, cap in hand, to donors. And that's not all.
That is a scandal as far as [I] am concerned, the Zambian government is not doing the country a service, we are not getting what is due from our resources and that I have said on several occasions and that is true and it is increasingly getting worse."
"The Zambian mining industry was the only industry that was large enough for the country to get revenue that would meaningfully contribute to tangible economic growth and development."It is a general problem for developing countries, which reply to an unusual degree on taxing corporations - because it's so hard to tax large numbers of often very poor people.
World leaders are discussing the Millennium Development Goals in New York. There is an awful lot of focus on aid levels. Which is OK. There will be, we hope, some discussion of the importance of tax. But almost certainly not enough, given that - as the latest African Economic Outlook notes:
"On average in the region, 441 USD of taxes are collected per person per year while 41 USD of aid is received per person per year. In other words, if Africa were a single country, collected taxes represent more than ten times the amount of aid the region receives."
It's good to see people like Dr. Mpande getting the focus right.