Africa-Press – Zambia. Small and Medium Enterprises (SMEs) remain the backbone of every country’s economy. Small businesses provide alternative means of livelihood for citizens. Those who choose to run a small business not only free up jobs for others but also become job creators themselves. SMEs also contribute greatly to GDP, and the stability of any country’s GDP depends on them because this sector is predominantly local.
For SMEs to survive, they must be nurtured and supported to grow. Compliance should be simple, and the tax burden—including fees and other payments—should be bearable.
In the past, SMEs fell under the Ministry of Commerce, but now they have their own ministry. However, we are increasingly seeing rising compliance burdens on SMEs from various government departments, all trying to milk the cow they don’t help feed.
For example, in a certain sector, the fees are as follows: Fire Licence – K1,500; Health Certificate – K5,000; Business Permit – K6,000; Forms – K500; Sector Licence – K13,000. The total is K26,000! This must be paid for each branch, every year. On top of this, if your turnover is below K5 million, you pay 6% Turnover Tax—which doesn’t even consider costs! How can a business pay licence fees of K26,000 per year, without even treating these as deductible costs? How do we expect this sector to grow?
Capital for a woman selling vegetables is K3000! This woman has no chance moving into a nice small vegitable shop even if the rent is k300!
What is worrying is that business is slow, yet these departments don’t care—they continue harassing businesses. How can we pay when we can’t sell? What should we do next? The maximum combined fees should not exceed K850 if we truly want businesses to grow.
Besides these fees, there are salaries for employees, NAPSA, NHIMA, PAYE, Workers’ Compensation, and the Skills Levy. Then you have to pay rent three months in advance. After that, you are told to pay a private company to dispose of waste—even after paying all those fees to the council that still cannot collect your trash for free.
For those selling alcohol, it’s even worse—about 86% of their turnover goes to ZRA! This only encourages illicit and fake alcohol.
If we truly care about businesses, let us listen to them. Recently, we even received text messages saying we must pay someone for storing clients’ data. But are they the ones storing it for us?
If we do not address these issues, we shall never build a formidable middle class or harness the full potential of SMEs. We shall never create millionaires. This is our country, and we deserve to enjoy its opportunities.
We have hardworking men and women who do not want to resort to crime but instead want to comply and operate in the formal sector to help build the country. Unfortunately, all these fees and taxes push them into the black market.
On the Copperbelt, shops often open only after 17:00 when council workers have knocked off. Is this normal? A Zambian should be able to start a legal business with as little as one thousand dollars (about K23,000). But if registration fees alone cost K26,000, then what should people do?
We must take this issue seriously. I believe the President should intervene, because at the rate we are going, we shall discourage citizens from starting businesses and becoming responsible taxpayers.
We should also allow payment plans for these fees. For a business to make money, it first has to sell its products. Why do departments demand their money upfront without caring how it is generated? One of the good principles of taxation is flexibility. We call for flexibility—the same way the mines have been given flexibility. Even under Turnover Tax, let us subtract overheads such as rent, licence fees, and salaries. These costs should be morally tax-deductible.
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