By Amos Sikaonga 
By Cecilia Chiluba
An Economist has observed that the current tax implementation models such as the Smart Invoice have potential to disenfranchise participation of Small and Medium Enterprises (SMEs) in the domestic economy.
Launched in 2024, the Smart Invoice aims to streamline Value Added Tax (VAT) refunds and enhance revenue administration by reducing tax leaks.
All VAT registered taxpayers are required to issue electronic invoices using the Smart Invoice.
However, Kelvin Chisanga noted that only entities with the ability to use the Smart Invoice are now conducting serious business activities.
“Smart invoice is relatively a good tax model to monitor compliance and foster strong tax fortitude from a general perspective but the current way of implementation is forcing many Zambian businesses to face difficult business situations.”
“It lacks proper methods to help uplift the masses out of unemployment or those who are not compliant with businesses,” Mr. Chisanga observed
He said this will further breed another situation which may tend to have a bad effect on domestic production and growth, especially for those who are still struggling with a backlog of unexplained tax legacies.
According to Mr. Chisanga, some businesses never understood tax structures well upon registration and worse off before the new system came on board with smart technology.
“So, at the current level of tax complicity and difficulties being faced is now a serious part of hindrances to smooth business especially with regards to the small businesses and individuals who have found tax knowledge a bit complex in relation to its current applicability.”
“On the other hand, there are serious aspect that the system has and I see a number of sales invoice will be having issues on VAT claims given the situation of having too many credit notes in respect to certain industries like the oil companies, where they are currently fighting to be exempted from the use of the system for certain operations,” he added.
He said the system could have been very helpful if there was a model of lenience to build up confidence and compliance mechanisms to slowly cushion the high level of poverty.
“The biggest problem that most businesses have, is that most of the economic players don’t really understand tax structures pretty well, as others are on certain tax like income tax which looks to be a more complicated and expensive tax plan, when in actual sense their businesses are not even supposed to have that type of taxation formula.”
“I think Zambia Revenue Authority (ZRA) being a tax agent and implementing revenue house of the Ministry of Finance and National Planning, has not dealt with informational and educational components of the taxation framework to make corporate citizens fully understand most matters of tax,” Mr. Chisanga said.
He noted that if not carefully looked into, the current tax situations will seriously discourage many ordinary Zambians from conducting business activities, making it difficult for the government to make the cost of living bearable.
“Yes, we all know that Zambia’s tax is narrow and has strong standing limitations in many areas, and the tax basket should play a bigger role given that only a few numbers of taxpayers are said to be actively on the revenue profile,” he added.
Cecilia Chiluba 
Joseph Tembo