Opinion / Columnist
The future of Zimbabwe's economic growth through proper collection of taxation and diaspora taxation
01 Jul 2019 at 18:50hrs | Views
Zimbabwe is a country that is coming out of three decades of of economical abyss The Zimbabwean economic challenges are many and addressing them will not happen overnight. Security situation has always been perfect. The economy is fragile and lacks the capacity to carry out basic functions of sustaining and in providing security and economic opportunity.
A credible public revenue "taxation" system is not fully functioning. Without taxation, creating jobs, reconstruction of infrastructure, health and education is very challenging. There are few tax evasion prosecutions and this has encouraged companies to get away with murder. There is no open system of declaring profits and losses in a public domain. The secrecy surrounding this tax declaration breeds massive tax evasion. Billions of dollars are being lost in un paid taxes and serious externalised funds.
Zimbabwe has been reduced to a consumer state and companies only come to sale and not to produce. Millions of dollars escape the radar everyday.
Externalisation is now done by every person. A lawyer is paid in UK for services he renders in Zimbabwe. A medical doctor treats and practices in Zimbabwe and is paid in Sweden. Groceries are paid for in USA Canada South Africa and UK and deliveries are done in Zimbabwe. People pay for US dollar abroad and the relatives receive it in Zimbabwe. Dollar circulation is throttled. All this is happening and no one is caring why??
The political leadership is constantly engaged in petty political squabbles that squander valuable time and resources. The majority of the citizens are very poor with not much money to spend outside of their daily necessities such as food, water and shelter. Government grand vision in infrastructure development programs to create jobs and elevate poverty is very limited. Institutionalized corruption in the government, the private sector and Non-Governmental organizations is a major problem hindering economic development. Ministers compete to build mansions and drive the top of the range cars at the expense of the impoverished masses.
Complex and outdated tax laws: The tax law, which was put into practice for more than 5o years could not serve the current economic set up and could not go with globalization and automation. Complexity in tax laws together with high rates and many tax brackets, and narrow tax bases could not help the system collect the due revenue, where would domestic tax be collected when 90 % is self employed and no machinery to tax them. those formally employed have no pay at all and if they are paid they are the only ones taxed.
Weak Tax administration: Tax administration was characterized by weak assessment, collection, follow up, and enforcement due to lack of skilled manpower, proper work procedures and rampant corruption Zimbabwe does not receive direct donor support, but the country receives humanitarian donation through UN-agencies and international NGOs. Due to corruption and partisan politics most of Zimbabwe endowments corruptively spent by few through their own interest.
While these are huge economic challenges, there is abundance of economic opportunities. The overall security situation is improving.
Zimbabwe has abundance natural resources that are in high demand all over the world. There is growing demand for Zimbabwe Diamond livestock and farm products in other growing economies. People are queuing for our ivory and out resources.
The Zimbabwean economy is powered by remittances from overseas. America , Australia, and Europe are the main sources of remittances. But without a proper taxing regime for those abroad we continue shooting our feet.
The Government can play a role by collecting taxes from Diaspora after all thats the major employed sector.
To generate the revenue required for security, create jobs, build infrastructure, health and education, the government should concentrate in creating credible and working taxation regime that makes sure telecommunication companies and money remittances, real estate transactions, import and export companies are paying their tax dues.
Government must tax diaspora by taxing all monies sent back home.
Zimbabwe should have experience in tax collection and effective audit systems that encourages tax payment and discourages tax evasion. The government can learn from Others in ways to improve and apply sound tax collection regime.
The government can play the constructive role in matching international aid to key infrastructure projects like rebuilding roads, bridges, ports, and factories destroyed during the sanction period International Aid can add economic vitality if employed constructively.
Diaspora Recognition: The economic impact of the Diaspora cannot be ignored and the every year Remittances from Diaspora send to Zimbabwe is estimated 2.8 Billion, so that government must engage the Diaspora and implement policies to recognize their role and contribution to the economy, and give them incentives to invest and reduce costs of doing business.
The Ministry of Finance and Planning has not shown transparency but to develop economically, the culture of corruption, nepotism and disregard for the rule of law must come to an end from all government and private sectors. The government must invest technologies that will make difficult for corrupt officials to steal public funds such as electronic systems. Payment fees in ports,airport, telecommunications and money remittances agencies can all be made electronically to the government directly.
Creation of an independent entity with power and mandate that can deal with corruption is indispensable in the fight against culture of corruption. Coming to Zimbabwe must be made pleasant. At the moment our airport resembles a war zone. Officers will be chatting among themselves while passengers que for hours. Client care is completely zero it feels like a crime to visit home. One is reduced to a pig and humiliated by immigration and custom officers at the airport. The request for a bribe os so open and no effort to hide it. The point of entry is actually a prohibitive area in Zimbabwe and the responsible ministry must do something for the love of our country.
Finally the government must take substantive measures in reforming the country's old system of taxation, because reducing poverty requires economic growth, a large volume of investment and, more jobs. Effective and sustainable development also depends on provision of a wide range of welfare services such as education, health care and infrastructure.
These cost money, and development aid will never be able to fully meet this need. Better tax systems will provide zimbabwe with revenues on a permanent basis that are large enough to finance a welfare society. On the other way, better international benefit and spent to the sustainable project such as, infrastructure and resource mobilization program will help the country to the development way and will contribute to create more jobs and equity among citizens while the country get international investors who dare to invest country's natural resources and fresh opportunities.
All the honourable thieves and greedy high spenders in high offices should be stopped. By so doing a healthy investment area is created and the masses benefit.
Vazet2000@yahoo.Co.uk
A credible public revenue "taxation" system is not fully functioning. Without taxation, creating jobs, reconstruction of infrastructure, health and education is very challenging. There are few tax evasion prosecutions and this has encouraged companies to get away with murder. There is no open system of declaring profits and losses in a public domain. The secrecy surrounding this tax declaration breeds massive tax evasion. Billions of dollars are being lost in un paid taxes and serious externalised funds.
Zimbabwe has been reduced to a consumer state and companies only come to sale and not to produce. Millions of dollars escape the radar everyday.
Externalisation is now done by every person. A lawyer is paid in UK for services he renders in Zimbabwe. A medical doctor treats and practices in Zimbabwe and is paid in Sweden. Groceries are paid for in USA Canada South Africa and UK and deliveries are done in Zimbabwe. People pay for US dollar abroad and the relatives receive it in Zimbabwe. Dollar circulation is throttled. All this is happening and no one is caring why??
The political leadership is constantly engaged in petty political squabbles that squander valuable time and resources. The majority of the citizens are very poor with not much money to spend outside of their daily necessities such as food, water and shelter. Government grand vision in infrastructure development programs to create jobs and elevate poverty is very limited. Institutionalized corruption in the government, the private sector and Non-Governmental organizations is a major problem hindering economic development. Ministers compete to build mansions and drive the top of the range cars at the expense of the impoverished masses.
Complex and outdated tax laws: The tax law, which was put into practice for more than 5o years could not serve the current economic set up and could not go with globalization and automation. Complexity in tax laws together with high rates and many tax brackets, and narrow tax bases could not help the system collect the due revenue, where would domestic tax be collected when 90 % is self employed and no machinery to tax them. those formally employed have no pay at all and if they are paid they are the only ones taxed.
Weak Tax administration: Tax administration was characterized by weak assessment, collection, follow up, and enforcement due to lack of skilled manpower, proper work procedures and rampant corruption Zimbabwe does not receive direct donor support, but the country receives humanitarian donation through UN-agencies and international NGOs. Due to corruption and partisan politics most of Zimbabwe endowments corruptively spent by few through their own interest.
While these are huge economic challenges, there is abundance of economic opportunities. The overall security situation is improving.
Zimbabwe has abundance natural resources that are in high demand all over the world. There is growing demand for Zimbabwe Diamond livestock and farm products in other growing economies. People are queuing for our ivory and out resources.
The Zimbabwean economy is powered by remittances from overseas. America , Australia, and Europe are the main sources of remittances. But without a proper taxing regime for those abroad we continue shooting our feet.
To generate the revenue required for security, create jobs, build infrastructure, health and education, the government should concentrate in creating credible and working taxation regime that makes sure telecommunication companies and money remittances, real estate transactions, import and export companies are paying their tax dues.
Government must tax diaspora by taxing all monies sent back home.
Zimbabwe should have experience in tax collection and effective audit systems that encourages tax payment and discourages tax evasion. The government can learn from Others in ways to improve and apply sound tax collection regime.
The government can play the constructive role in matching international aid to key infrastructure projects like rebuilding roads, bridges, ports, and factories destroyed during the sanction period International Aid can add economic vitality if employed constructively.
Diaspora Recognition: The economic impact of the Diaspora cannot be ignored and the every year Remittances from Diaspora send to Zimbabwe is estimated 2.8 Billion, so that government must engage the Diaspora and implement policies to recognize their role and contribution to the economy, and give them incentives to invest and reduce costs of doing business.
The Ministry of Finance and Planning has not shown transparency but to develop economically, the culture of corruption, nepotism and disregard for the rule of law must come to an end from all government and private sectors. The government must invest technologies that will make difficult for corrupt officials to steal public funds such as electronic systems. Payment fees in ports,airport, telecommunications and money remittances agencies can all be made electronically to the government directly.
Creation of an independent entity with power and mandate that can deal with corruption is indispensable in the fight against culture of corruption. Coming to Zimbabwe must be made pleasant. At the moment our airport resembles a war zone. Officers will be chatting among themselves while passengers que for hours. Client care is completely zero it feels like a crime to visit home. One is reduced to a pig and humiliated by immigration and custom officers at the airport. The request for a bribe os so open and no effort to hide it. The point of entry is actually a prohibitive area in Zimbabwe and the responsible ministry must do something for the love of our country.
Finally the government must take substantive measures in reforming the country's old system of taxation, because reducing poverty requires economic growth, a large volume of investment and, more jobs. Effective and sustainable development also depends on provision of a wide range of welfare services such as education, health care and infrastructure.
These cost money, and development aid will never be able to fully meet this need. Better tax systems will provide zimbabwe with revenues on a permanent basis that are large enough to finance a welfare society. On the other way, better international benefit and spent to the sustainable project such as, infrastructure and resource mobilization program will help the country to the development way and will contribute to create more jobs and equity among citizens while the country get international investors who dare to invest country's natural resources and fresh opportunities.
All the honourable thieves and greedy high spenders in high offices should be stopped. By so doing a healthy investment area is created and the masses benefit.
Vazet2000@yahoo.Co.uk
Source - Dr Masimba Mavaza
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