At 47 years old, the solution is corruption

A colleague this morning intimated that she would be “killed” by taxes. She is importing lingerie and for only a small consignment she is being charged an exorbitant total.

Continuing her lamentation, she swore to sale them at an extremely high price to recover her cost. I made a suggestion to her that the solution was going to have to be corruption. After all, that way, her clients will not repudiate tender her enterprise and she can still keep her business alive, and eventually keep her family fed.

This sounds rather absurd. How can corruption be a solution? Well we live in a world where we want to good things including a “corrupt-free” social and business environment. But we are seldom willing to make relevant sacrifices that change demands.

High taxes in this country have simply stopped adding value to our lives. To start with, government doesn’t account to us how they use the money we pay in taxes. Moreover, in a liberalized economy it is the government’s obligation to make the cost of doing business low enough to encourage industrial innovation, and growth. This not just for the large corporations but more for small enterprises.

Secondly, the higher taxes do not lead to the buyer enjoying access to high quality, low cost products. Instead it worsens the negative price constriction, an effect that causes economic coronary failure.

It is no rocket science that higher taxes are negative to the economy. Quality cannot be preserved or maintained in an economy where the taxes force people to either resort to second hand or low quality products or just as well to the solution of corruption.

Corruption can solve your problems, help you continue running your business on profits and putting more money in your pocket (hence arriving at the same objective the PF government espouses for the people of Zambia).

In Zambia second hand products are taxed as if they were luxurious first hand products. This puts both the client and the tax collecting agent on a podium of temptation. For instance recently a ZRA employee was jailed for asking to be bribed and for being bribed in order to give the client “due” advantage.

Let me take a turn to ICT and say, a government anywhere in the world, today, in the 21^st Century which does not have a clear road map to ensure that ICT is given unprecedented advantage because of its impact on all sectors, would be lacking not only vision, but wisdom as well. So far, I have not seen anything that suggested that the PF government will be pragmatic about the ICT sector and embrace it as top priority tool for achieving development and progressing our economy.

A suggestion worth taking a second look at it is this that taxes on computers, computer accessories, and internet enabled products including phones and palmtops should be reduced practically to ZERO. This will stimulate the ICT industry and conjure its growth. This would in turn make it possible for ICT companies that are able to develop systems that can help curb corruption do so in order to lead to a corrupt free nation.

Let me explain. If all systems are computerized and security in place, ZRA can demand to be partner to most of the suppliers in the world whose products find route into Zambia. As such whenever a purchase is made, a buyer can notify ZRA and a copy of receipt is sent to them without a chance of manipulation.

This can only be possible if Government to start with doesn’t privatize its responsibility of ensuring that communication (just like roads) is provided for every citizen. Government must lead in ensuring that every urban home is fitted with high speed internet, and also ensure that computers are accessible for every home.

If this were the picture, there would be no need to travel to the border to negotiate the rate of tax. Tax would be calculated at the point of purchasing and probably even paid for, at that point, to the revenue authority. This seeming incoherent superstition of my analysis is believable and practical.

A computerized and normalized system (where you pay tax based on the real cost of product), as well as a bearable tax regime, would in fact wipe out counterfeit, secondhand, polluting, poor quality products from our market. Most importantly Zambians will not turn to corruption and hence the President’s dream will become reality.

The president in his address on the eve of Independence Day reiterated a Zero tolerance agenda against corruption. Truth is, that intolerance towards corruption it will only make people find other ways of making sure that they are not caught. Not that we should tolerate it, if ever corruption will be a thing of the past, people must not be squeezed to the point where the only way they can afford is by corrupting someone in the system.

Finally, unless we employ the full power of ICTs in Zambia we will be talking about corruption and underdevelopment a 100 years from now.

As you may agree, this is going to be a profound premise to argue taxes on technology. Then again it's a profound view on why Zambia is extremely corrupt. The question is, will Zambia still be dealing with these causes of corruption in the next 10 years. Happy 47th Independence Day.