The Zambia Revenue Authority – ZRA has confirmed that it remains ready to implement the taxation of global digital companies that are generating significant revenues in Zambia but have no physical presence and are currently not being directly taxed.
One of the taxation principles is that all revenue and transactions originated in Zambia are subject to being taxed but most global digital companies are currently managing to collect massive revenues from the country without being directly taxed.
In February 2020, Facebook CEO Mark Zuckerberg announced his support behind international reforms that would require Silicon Valley tech giants to pay more tax. According to the voice of America, Zuckerberg backed plans for digital tax reform on a global scale and admitted that the current system for taxing multinationals is based on where they are physically located, which sees internet companies such as Facebook pay the majority of their tax in the United States.
And ZRA corporate communication Manager Topsy Sikalinda has confirmed exclusively to the Zambian Business Times – ZBT that government is currently working on a law that will enable the taxing of entities like Facebook, Google and other digital businesses and that once discussions come to conclusion, ZRA will implement the measures as the authority only operates within the confines of the laws.
Entities such as Facebook, Google, Twitter among others are currently generating huge revenue from Zambian entities and individuals despite not having their presence in the country and being taxed. This has however raised concerns as to why government is not taxing such entities despite receiving direct payments from Zambians individuals and businesses.
On the closure of the Zambia – Tanzania border, ZRA has stated that despite the Nakonde border being physically closed due to its high risk COVID – 19 entry point, the authority is still conducting online transactions and clearance to individuals that wish to record entries.
Sikalinda told ZBT in an exclusive interview on May 13, 2020, that ZRA systems at all borders across the country are still operating through online transactions hence individuals are able to clear goods without them entering the country.
He said tax collection by the authority has also been affected amid COVID – 19 pandemic and it is in this line that ZRA has supported governments approach of giving relief to the business in terms of tax waivers as announced by the Minister of Finance in his latest address on the country’s economy.
When asked how much in terms of revenue loss will the authority record amidst Covid -19 pandemic, Sikalinda said the amount is not predictable as operations are still on-going via online transactions.
“It’s difficult to give revenue impact in terms of amounts because the borders may be closed but systems are not closed meaning one can still go ahead to clear goods and do certain transactions with ZRA online and people are still able to log in their entries except that the goods will not enter the country but still pay in advance,” He added.
