THEME: VOTE FOR TAX JUSTICE! Public sector can raise significantly more revenues by reforming tax systems, fighting tax evasion, correcting inequities, and combatting corruption… which in turn if progressively spent will lead to better gender responsive public services. During this important period of election we call on the leaders to commit towards; 1. Election Campaign Funds transparency; Political parties must be transparent by declaring their sources of funding; these have the ability to erode a country’s Domestic Resource Mobilisation capacity if it’s shrouded in corrupt practices and agreements. Such arrangements may lead to tax give aways, either through harmful tax incentives, manipulation of tax laws to suite the funders or the facilitation of tax avoidance/evasion practices with no punitive action taken against the perpetrators. It is therefore vital that Political parties right from the beginning demonstrate to the Zambian People that in their quest to get into power they will not end up selling off the nation’s wealth essential for the delivery of public services and uplifting the Zambian people out of poverty. 2. Combat Illicit Financial Flows: Political parties must demonstrate to the Zambian people their resolve to urgently address illicit financial flows which is facilitated by 3 major factors which include; corruption, money laundering, tax avoidance/evasion with the tax avoidance/evasion accounting for 75% of the illicit flows from the country. Political Parties must therefore demonstrate prioritisation of this challenge and how they intend to address it, which among others should include: a. Measures to ensure automatic information exchange both at local and international level – the enactment of the Access to Information Bill a must. b. Implement the recommendations by the Thabo Mbeki Panel Report on Illicit financial flows. c. All companies must pay their fair share of taxes, respect labour standards, human rights, and the environment. d. A clear demonstration on how they intend to raise their financing for development at the backdrop of various political promises. e. Push for more vigorous domestication and implementation of the UN convention against corruption as well as measures to overcome impediments to eradicate the vice. 3. ZRA Funding; Provision should be made to increase funding to facilitate capacities to implement tax reforms, especially in the mining sector and anti-avoidance practices thus improving domestic resource mobilization. 4. Specific Reforms: a. Mining Taxation: the current administration has introduced a single tier tax system at the backdrop of lack of capacity to administer a profit based tax system and alleged rampant tax avoidance practices as evidenced by numerous research reports on the mining sector in addition to government and private sector audits on specified mining companies. The new tax system is not the best and the most optimal but tries to address the challenges of tax avoidance and the lack of information mainly caused by the mining sector’s secrecy around their operations. Therefore, political parties should not allow any arm twisting by the mining firms as demonstrated by Lumwana mines (closure of mine if new tax regime is implemented) , KCM (layoff employees) and Glencore- Kabwe Zinc Mine (closure and layoff of employees) and instead remain resolute and open to dialogue for a possible win win solution for the country. Mining firms that will resort to arm twisting the government must be allowed to leave the country as they don’t have the best interest of the nation and most stand accused of tax avoidance. See attached AAZ reaction to Glencore-Mopani EIB report b. Double Taxation Agreements: Review the current network of Double Taxation Agreements (DTA’s) by renegotiating or cancelling when they give away too many taxing rights. Revenues are often harmed not only by treaty abuse/shopping, but by normal treaty ‘use’ where capital and income flows between treaty partners are predominantly in one direction. Given the absence of conclusive evidence that such revenue sacrifices do indeed deliver investment, jobs or growth for low-income countries, initiatives to tackle treaty abuse should not just update inadequate anti-abuse protections of old treaties, but address the balance between source and residence taxing rights. c. To Government – Ring Fence Public resources: we call on the government to ensure that it ring fences public resources to avoid abuse and unplanned expenditure. We especially urge the government to avoid using public resources for campaign purposes and ensure that all public resources are prudently managed as budgeted for in the 2014 National Budget for the delivery of essential public services. Conclusion: Overall, the party that will form government following the elections should be looking at working towards an optimal tax system that seeks to strike a balance between ensuring the greatest possible benefit for the public and, at the same time, encouraging quality, sustainable investment. When companies pay their fair share of tax to our country it has the power to help us build a better future. Tax has the power to build schools and educate our children; the power to build roads and allow goods to travel; to provide medicines for better healthcare; the power to provide vital public services. Tax power can help us to release our potential. FOR FURTHER DETAILS CONTACT: kryticous Patrick Nshindano; [email protected], +260 966 629122
Posted on: Sat, 13 Dec 2014 09:30:16 +0000
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