A New Dawn for Zambia
By Francis Maingaila
Lusaka, Zambia - February 27, 2025 - The Zambia Revenue Authority (ZRA) has launched the country’s first-ever National Tax Summit aimed at addressing Zambia's challenges in Domestic Resource Mobilization (DRM) and reinforcing the role of taxation in driving national development.
ZRA Commissioner General Dingani Banda, speaking at the summit, called for urgent reforms to reduce Zambia’s dependence on borrowing and external aid.
He outlined key strategies to improve tax administration, plug revenue leakages, and expand the tax base.
Banda stressed that taxation is fundamental to national development as it enables the government to fund essential services, infrastructure, and poverty alleviation programs.
Despite Zambia’s tax-to-GDP ratio remaining below 20% for the past decade, Banda pointed out that ZRA’s contribution to the national budget has significantly increased—from 49% in 2021 to 70.5% in 2024, with projections to rise to 71.7% in 2025.
He emphasized that Zambia’s narrow tax base is a significant challenge, as it currently depends heavily on just five sectors: mining and quarrying, wholesale and retail trade, manufacturing, financial services, and public administration.
To diversify and expand the tax base, Banda said ZRA plans to bring more sectors into the tax net.
Banda also underscored the need to curb revenue leakages, particularly in VAT collection.
He introduced the Smart Invoice System, aimed at enhancing tax compliance, transparency, and efficiency.
"This system will address the persistent issue of VAT refund fraud, which has been a significant challenge to government revenue," he indicated.
"Through these measures, the government is set to increase monthly VAT refunds from K800 million in 2021 to between K2 billion and K2.5 billion by 2025, ensuring that businesses receive timely payments while preventing fraudulent claims," he added.
Banda announced that ZRA is shifting towards a data-driven tax administration model.
"This includes enhancing digital tax collection systems, strengthening compliance monitoring, and expanding taxpayer education," he suggested.
He said ZRA aims to leverage technology to improve tax efficiency, reduce tax evasion, and streamline service delivery for businesses and individuals.
Another crucial reform, the One-ZRA Approach, is designed to improve customer service, close the tax knowledge gap, and recruit personnel with specialized tax expertise.
ZRA is also ramping up international cooperation, strengthening the exchange of tax information with global institutions to tackle tax avoidance and illicit financial flows.
Banda called for greater stakeholder participation, urging policymakers, industry leaders, tax experts, and civil society to actively contribute to shaping Zambia’s tax policies.
He emphasized that the summit is an important platform to generate actionable recommendations for improving DRM and supporting sustainable economic growth.
“The success of our tax system depends on collaboration,” Banda remarked, emphasizing that Zambia’s taxation challenges can be overcome through collective efforts.
He reaffirmed ZRA’s commitment to surpassing revenue targets, citing a 4.5% increase in collections in 2024 and a goal of K156 billion (19.1% of GDP) for 2025.
Banda expressed confidence that the ongoing reforms will strengthen Zambia’s fiscal position and reduce dependence on external funding.
ZRA Board Chairperson Dr. Caleb Fundanga, also speaking at the summit, echoed the need for reforms, stakeholder collaboration, and technological innovation to improve tax collection.
Fundanga acknowledged the crucial role that taxpayers play in funding government operations and national development.
He highlighted ZRA’s success in meeting revenue targets, which reflects the resilience and commitment of businesses and individuals contributing to the tax system.
One of the key topics Fundanga addressed was the modernization of tax administration through the implementation of the New Operational Model (NOM).
This model is designed to simplify tax compliance and improve efficiency in revenue collection.
Fundanga emphasized that ZRA is working to make compliance easier and align with the government’s broader domestic resource mobilization strategy.
Fundanga also reported record-breaking tax collections in 2024.
ZRA collected K148.5 billion in gross taxes, with K17.6 billion issued in refunds, resulting in a net tax outturn of K130.9 billion.
This exceeded the annual target of K125.3 billion by K5.6 billion (4.5%) and marked a 30.1% increase from 2023.
He attributed this success to ongoing tax reforms, enhanced enforcement strategies, and improved taxpayer engagement.
Another significant point Fundanga raised was ZRA’s shift in strategy from enforcement to facilitation to encourage better tax compliance.
He explained that building trust through efficient service delivery is more effective than strict enforcement.
“Facilitation yields better compliance than enforcement,” he said.
ZRA is focusing on technological innovation, customer engagement, and data-driven enforcement to achieve this goal.
Fundanga also stressed the importance of stakeholder engagement, urging summit participants to share insights and innovative solutions to improve tax administration.
He emphasized that collaboration between the government, businesses, and taxpayers is essential to creating a fair and efficient tax system that will support Zambia’s economic growth.
Fundanga concluded by reaffirming the ZRA board’s commitment to driving reforms that enhance revenue mobilization while also making tax compliance simpler and more transparency
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