Q FM Africa's Modern Radio
Isaac Mwaipopo – CTPD Acting Executive Director
The Centre for Trade Policy and Development (CTPD) has observed that the Zambia Development (ZDA) Act of 2006 has various weaknesses and loopholes and that the Zambian Tax Incentives system may be contributing to loss of tax revenues.
In a statement issued to QTV News today, CTPD Acting Executive Director Isaac Mwaipopo says the ZDA Act of 2006 offers a wide range of incentives in the form of allowances, exemptions and concessions to both local and foreign investors provided they are registered with ZDA.
Mr. Mwaipopo explains that the Act also stipulates investment thresholds that investors have to meet to qualify for fiscal and non-fiscal incentives.
He furthermore explains that these Tax Incentives include deductions, exclusions, or exemptions from a tax liability offered as an enticement to engage in a specified activity such as investment in capital goods for a certain period.
He says as a matter of urgency, there is need to address these problems and improve collection of tax revenues.
Mr. Mwaipopo says for instance the Zambian Government does not carry out any cost-benefit analysis on a case by case basis to inform its decisions when awarding tax incentives to potential foreign investors.
He says decisions to award tax incentives are mostly based on business plans, some of which may not meet the set criteria.
Mr. Mwaipopo says his organization has also noted from studies conducted on tax incentives that there are no mechanisms to monitor, document, evaluate and review implementation of the tax incentives.