Government committed to working with business on tax reforms

28 May, 2023 - 00:05 0 Views
Government committed to working with business on tax reforms Deputy Minister Clemence Chiduwa

The Sunday News

Caroline Mutsawu, Sunday News Reporter 

FINANCE and Economic Development Deputy Minister Clemence Chiduwa has reaffirmed the Government’s commitment to cooperate with the business community and tax practitioners in ensuring a balance between revenue collection and facilitating economic growth through investment promotion.

Officially opening the 7th Annual Tax Conference on Friday in Victoria Falls which ran under the theme: ‘Navigating the tax terrain in a demanding world’, Deputy Minister Chiduwa said the Government would continue reviewing the tax policy mindful of the need to attract investment and collecting optimal revenue from the productive sectors.

“The review of the tax policy reform by the Government creates a balance between facilitating growth and development of the economy, attracting investment and collecting optimal revenue from the productive and consumptive sectors.”

The conference was anchored on the review of the country’s tax policy, in line with the dynamic nature of the macro-economy, as well as in response to international developments and commitments. 

“Tax policy reform mechanisms by Government also encompasses the need to enhance ease of administration, embracing technology in the collection of revenue, streamlining cumbersome administrative procedures, as well as strengthening infrastructure necessary for the ease of transporting goods across international borders. 

“Reforms by the Government have also targeted streamlining tax expenditures in line with policy priorities, particularly guided by the National Development Strategy 1 (NDS1),” he said.

He said the Government was committed to cooperate with the business community, tax practitioners, academia and other stakeholders on tax policy related issues.

Deputy Minister Chiduwa said mindful of the need to move towards an empowered and prosperous upper middle-income economy by 2030, the Government made a few reforms to the tax policy. 

“The productive sector has, over the years, benefited from a generous tax regime, cognisant of the need to ensure productivity and international competitiveness. However, multiplicity of such incentives has undermined revenue collections, hence, the need for review.

“You may be aware that Government recently excluded mining houses from Special Economic Zone incentives, guided by the analysis of companies’ production and financial models, which show profitability under the standard regime.

“The mining sector is also a beneficiary of a generous tax regime, which includes, but not limited to indefinite carry over of losses, duty free importation of capital equipment, deferment of Value Added Tax on eligible capital equipment and 15 percent Corporate Income Tax for holders of Special Mining Leases, among other incentives,” said Deputy Minister Chiduwa. 

He added that the Government also replaced the rebate of duty on capital equipment imported by the agriculture, energy, manufacturing, mining and health sectors with a zero percent customs duty regime, in order to ensure administrative simplicity.

He said the country’s tax regime remained favourable for the productive sector, with a corporate tax rate of 24 percent and a Value Added Tax rate of 15 percent coupled with sector-specific tax incentives, thereby ensuring productivity and competitiveness.

The deputy minister said there were opportunities of under or non-payment of tax, particularly by multi-national corporations through tax avoidance mechanisms. 

“Notwithstanding the existence of anti-avoidance legislation, Government remains guided by international organisations such as the Organisation for Economic Cooperation and Development (OECD) and the United Nations,” he said. Tax experts, academia and other stakeholders attended the conference. – @5_Shannico.

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