BROADENING THE DOMESTIC TAX BASE AND REVENUE TO SECURE DEMOCRATIC GAINS IN AFRICA: THE CASES OF TANZANIA AND ZAMBIA

By Chris Zumani Zimba

air-tanzania-787-8-boeingIt is shameful that many African countries are like a lovely couple that dream of being very happy and respected in society while they perpetually beg and live on hand outs from churched neighbors, Good Samaritans and street well-wishers. The consolidation of democracy in Africa is not secured and guaranteed as long as Kenya, Ghana, Nigeria, DR Congo, Zambia, Ethiopia, Egypt, Zimbabwe, South Sudan, Malawi, Chad, Angola, Burundi or Tanzania keep on cherishing the lazy idea and habitual practice of looking for foreign support or begging for donor funds either from the West or East. There is no way democracy can be secured and sustained in any country with increased poverty, hunger, starvation, high unemployment or massive citizen redundancy as well as religious dependency on donors. For democracy to thrive and work anywhere, the government of the day needs money and revenue to effectively and efficiently implement public policies and deliver quality services to the masses. The cases of Tanzania and Zambia are good examples for Africa to day.

According to a World Bank study, it was reported that used to lose more than $2.6 billion ($1 = 2,230.0000 Tanzanian shillings) annually at the main sea port alone due to inefficiencies and poor tax systems.  When President John Magufuli took office in 2015, he announced and began comprehensive policy reforms with the aim to transform the economy, reduce corruption and eradicate tax evasion. He both improved and broadened the domestic tax base and revenue collection systems with everything starting to change and improve for the better. In 2016, his government tax tribunal accused Acacia Mining, formerly known as African Barrick Gold, of tax evasion and ordered them to pay $41.25 million. By December, 2017, the Tanzania Revenue Authority (TRA) reported that ‘in the first six months of 2016/17 (July-December), they had collected a total of 7.27 trillion shillings ($3.26 billion) compared to 6.44 trillion shillings collected in the same period in the 2015/16 financial year’ which was a historical increase of 12.74%. Consequently, President Magufuli announced that he had used part of the money collected by the TRA to 4 new modern planes for Air Tanzania, ‘The Wings of Kilimanjaro’ including a 787-8 Dreamliner valued at $224.6 million from the Canadian firm, Bombardier Commercial Aircraft. This is what increased and improve domestic revenue must mean and do for the citizens.

The-Shimabala-Toll-PlazaLike Tanzania, Zambia is equally on the right path. Following the successful implementation of their key policy reforms and administrative measures, the Zambia Revenue Authority (ZRA) reported that they collected K39.2 billion Kwacha in domestic revenue between January and December 2017 which showed K1.5 billion Kwacha above their target. On July 12, 2018, the ZRA Commissioner General, Kingsley Chanda announced that his state agency has collected over K27.7 billion in gross taxes which is 6.4% above their target of K21.8 billion. In similar manner, it is clear that the road toll gates initiative by the National Road Fund Agency (NRFA) is a huge domestic revenue earner for Zambia. The NRFA records show that, the monies raised from toll gates annually since 2013 to 2016 was more than K1.1 Billion. In 2017alone, the NRFA raised K667.0 Million from toll fees. Both the ZRA and NRFA figures pragmatically show that Zambia can broaden its domestic tax base and increase its national financial portfolio in terms of domestic revenue which is highly commendable.

Generally, increased domestic revenue base will mean: 1. more and guaranteed money in their respective national treasury; 2.governments will begin to formulate, implement and monitor their own public policies; 3. periodical elections will be secured and assured; 4. the technical capacity for national electoral commissions or agencies will be improved both at national, regional, provincial and district level which is currently lacking in many countries; 5. the government will have ready money to build schools, hospitals, roads, bridges, drainage systems, markets or colleges for the citizens; and 6. There will be enhanced political stability and peace in a country as majority citizens will be empowered, content and happy with the public service delivery system. Therefore, the more Zambia, Tanzania, Uganda, Ghana or Algeria continue to broaden their domestic tax base and revenue with prudent, transparent, accountable and efficient utilization thereof, is the more the government will reduce poverty among its majority citizens, improve health and education services, implement designed public policies, service off external and internal debts, deliver campaign promises and consolidate and guarantee the gains of democracy in the region.

In conclusion, it is timely to warn that domestic tax funds must have visible results like in Tanzania where money from their national revenue authority is now buying Boeing 787-8 Dreamliners to raise more money for the national treasury. Despite all these big domestic income raised by the Zambia National Road Fund Agency between 2013 and 2018, it is shameful to report that a short drive from Kafue to Mazabuka or from Chipata to Chadiza is like driving from a brutal war zone to hell as pot and dam holes are both everywhere and throughout. While the citizens are now witnessing infrastructure development across the country, the PF government need to enhance public accountability, transparency and citizen inclusion in the utilization of increased domestic revenue from the Zambia Revenue Authority (ZRA) or NRFA given that incidences of embezzlement, misappropriation, misuse, looting and plunder of public resources is still very high in Zambia.  Honestly, this policy recommendation is certainly what can surely constitute good news for the citizens of either Tanzania, Uganda, Angola, Egypt, South Africa, Cameroon, Rwanda, Malawi, Kenya, Ghana or Mauritius. Africa has adequate and abundant resources that can be tapped to steer economic growth, development and modernization as long as responsive, efficient, transparent, accountable and inclusive domestic tax laws and revenue collection systems are established and supported with honest political will. In fact, this is a practical and sustainable path to reducing or ending Africa’s Western or Eastern exploitative donor dependency.

Chris Zumani Zimba is a Political Scientist, Author, PhD Scholar, Lecturer, Researcher and Consultant

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