By Nevson Mpofu
A recent ZIMCODD, Zimbabwe Coalition on Debt and Development symposium on the escalation of growing inequalities dubbed Promoting a robust and sustainable domestic resource mobilization framework hinged on fair, just and equitable tax regime rose eye brows on the rise of inequalities in Zimbabwe. A media engaged dialogue on the sidelines of a training meant to entrench writing skills on inequalities brought to the surface the current situation the country hangs on.
Taking the lead in this discussion and training to a press pack of sundry journalists in Harare, Angellah Mandoreba Fight In-Equalities Alliance Coordinator FIA ZIMBABWE pointed out that the country has the capacity to be self-reliant in its social and economic development since it has abundant natural resources. She however divulged that leakages undermine this a scenario which mudslingers the poor Zimbabweans who remain poor
‘’The country is much endowed with resources which the general public fail to access because of corruption , illicit finance flows and some forms of corruption . It is pathetic as well to note that taxes paid by these people who want to see a better Zimbabwe are not transparently accounted for .’’
Tax is at the center of Domestic Resource Mobilization. It is a platform for development through raising funds needed for sustainable economic growth and development. Taxation, she adds, acts as antidote to aid and debt dependence.
‘’Tax lies at the center of Domestic Resource Mobilization. It is a platform for development through raising funds needed for sustainable growth and development, but what is on ground is not the situation to prevail in a country with such abundant resources.
‘’The problem around is that there is no good tax governance and equitability. Taxes collected and how they are used is not an accountable process ‘’
‘’Sub-Saharan countries often collect 17% of their Gross Domestic Product through taxes against average of 35% in OECD , Organisation for Economic Co-operation and Development countries. African countries are losing between USD 470 million and USD 730 million per year in corporate in-come tax avoidable by multi-nationals. ‘’
This is 2021 IMF , International Monetary Fund Report on ‘Tax Avoidance in Sub-Saharan Africa’s Mining Sector According to OECD .
According to OECD , for every dollar that comes to Africa , $3 leave these countries . Between 2015 and 2017 Zimbabwe lost about US$3 to illicit-finance flows ’.
Angella speaks out further that heavy taxation is causing wide gaps of in-equalities causing extreme poverty and vulnerability. Taxpayers have no benefit from the taxes they pay. Her eloquent voice further digs deep that 7,9 million Zimbabweans are now living in extreme poverty , under the food poverty line of US$29,80 for each person a month
‘’This comes with progressive tax added to progressive spending summing up to challenging in-equality which later causes reduced in-equalities. Tax and in-equality is such a blow to the Zimbabweans exposed to poverty and vulnerability.
‘’What we need is a Government that can scrutinize budget to see that treasury strikes a delicate balance between revenue collection and wealth distribution’’
‘’Let us peg the 20% tax above the Poverty Datum Line. Let us also engage life style audits that Zimbabwe Anti-Corruption Commission promised us . We need to know where some individuals got wealth from’’.
‘’Zimbabweans continue to pay taxes yet corrupt activities continue to prejudice the country of much needed revenue’’
‘’Revenue is needed to finance developmental needs of the poor, yet the poor Zimbabweans remain poor ‘’ , she said
In her recommendations she said there is need to abolish unjust, harmful tax incentives to foreign investors. The awarding of tax incentives to multinational corporations must be an outcome of a stakeholder consultative process. Secondly the Minister of Finance and Economic Development must regularly review tax free thresholds cognizant of currency instability, inflation and market volatility. This must align thresholds to poverty datum line. ZACC and ZIMRA must undertake and act on intensive lifestyle audits of the rich Zimbabweans. Another recommendation says 2% tax must be scrapped or at least pegged above the poverty datum line. There is also need to introduce and implement a wealth tax to facilitate the redistribution of wealth from people who have too much wealth to meet the needs of the suffering majority.