Tembo urges govt to reduce import taxes to curb smuggling
By Staff Reporter
Patriots for Economic Progress (PeP) president Sean Tembo has expressed alarm how deep tax avoidance and evasion has been entrenched in the country.
Commenting Zambia Revenue Authority’s revelation that about 8,000 heavy duty trucks where dubiously imported into the country resulting into a loss of more than K480 million in potential tax revenue, Tembo called for quick reflection by the authorities to understand the reasons.
Tembo in a statement believed that the current customs duty charges by ZRA on imports, especially motor vehicles, is too high and unaffordable to the majority of the citizens, hence the reason for smuggling.
Tembo said It would be in the interest of both ZRA and the nation at large to reduce the customs duties especially on motor vehicles.
He said in most instances, the importation taxes were twice the price at which a vehicle might have been bought abroad.
Tembo warned that high taxes was the main driver of smuggling schemes and cartels between importers, clearing agents and ZRA customs officers.
“As Patriots for Economic Progress, we believe that no matter how intensified ZRA’s anti-smuggling operations might be, they will not manage to reduce smuggling for as long as import taxes at the border are too high. Most importers would rather take the risk of smuggling than pay the high import taxes at the borders. Similarly, most ZRA customs officers will fail to resist the temptation of being part of a smuggling cartel because of how lucrative it is, and no amount of disciplinary action against these officers is likely to work due to their small salaries compared to huge amounts that stand to be received if one is a part of a smuggling cartel. In fact, in future, ZRA risks running out of people to hire as customs officers because they would have hired and fired every citizen already,” said Tembo.
He added that PeP believed that if ZRA reduced the import taxes at border posts to a level that is reasonable and affordable, smuggling would die a natural death as there would be no need for an importer to take such an unnecessary risk.
“On the other hand, Government revenue collection would go up due to increased compliance levels and the citizens would also be happier as they can import their goods at affordable costs. ZRA on the other hand would save the huge amounts of money that is currently dedicated to anti-smuggling operations, and possibly channel such money towards increasing the salaries of ZRA customs officers so as to enhance their levels of probity and dedication to duty. Reduced import taxes would be a win-win situation for everyone. The Government in general and ZRA in particular must be reminded that tax collection is a volume business, it is not a mark-up business,” he said.