Q FM Africa's Modern Radio
A new report by ActionAid has revealed that Zambia has 13 restrictive tax treaties that dramatically restrict the government’s power to tax global companies doing business in Zambia and therefore unfairly limit the country’s potential to collect tax revenue.
ActionAid Zambia Acting Country Director Harriet Gimbo has advised government through the Ministry of Finance to urgently revise the very restrictive tax treaties that Zambia currently has in force, due to the potential for multinational corporate tax avoidance and the resulting negative impact on the country’s national budget and subsequently public services.
Ms Gimbo says the funds that are lost through tax avoidance are desperately needed to pay for schools, hospitals health and other infrastructure, and to sustainably and democratically fund the long-term fight against poverty and inequality.
She has explained that Tax treaties play a facilitating role in many of tax avoidance schemes used by multinational corporations to reduce their tax liability.
She says the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD) have both acknowledged that this is a major problem for developing countries.
She adds that the new study by ActionAid, based on an analysis of the provisions of more than 500 binding treaties signed by lower and lower middle income countries in Africa and Asia, has revealed that Zambia has 13 restrictive tax treaties with high and upper middle income countries signed since 1970, that have been assessed as very restrictive and therefore unfairly limiting the country’s potential to collect tax revenue.