Paying taxes comparable to death?
Economists site this quote by Benjamin Franklin, “in this world nothing is certain but death and taxes.” This quote it quite interesting. I mean how can tax be equated to something unbearable, so heartbreaking and devastating like death?
Why death though? It’s because death is the truth people never talk about, but it will certainly happen. People take funeral policies, knowing that one day they will die. No-one finds it interesting to discuss in their homes, so is it with Tax. However, Tax isn’t that bad as it seems to be, though many controversial questions arise in this particular field.
My 2 cents
In Zimbabwe, reports say that the Zimbabwe Revenue Authority is surpassing its tax revenue targets. A few years back, there was a report that was published in the press. It stated that, the Tax Man was being owed around 4, 5 Billion in tax payment defaults.
It got me thinking..
- So if ZIMRA is surpassing its targets how then can such an amount be stated to be owed?
- In a time where inflation has become the major headline, is it really revenue target surpassing or it’s inflation?
- If the formal sector is shrinking yet the informal sector remains hard to tax, who then is paying the tax?
- Isn’t the tax burden overwhelming very few people? If so who are these good Samaritans bearing the tax burden alone on behalf of others?
These are some of the questions I have and I know I am not alone on this. Many economists are asking the same on what is really cooking in the tax field. But the fact remains the same, taxes are not evil. Yes, there may be problems here and there but a tax is meant to benefit all of us, not harm.
“Taxman out to get you..?”
In 1770, a man by the name Targot unpleasantly described tax. To date, his description has led people to find much discomfort in issues around taxes. The public is just unaware of how the tax system works. The few that know the tax system have amazing levels of fear of the Taxman. Some business people have never set foot at ZIMRA offices in belief that the taxman is out to get them.
Why? The public views the Taxman as this large vicious cat and themselves as little innocent rats. Using this narrative, the “Cat” is there to deprive business owners from enjoying their hard-earned money. Howbeit that narrative is wrong. In fact Targot in his view of the tax said.“If tax is a burden imposed by force upon the weak, then the government would rest upon no other principle than that of might. The prince would then be regarded as a public enemy.”
This sentiment by Targot is the most accepted version of how people view the government when it comes to taxation. The state through ZIMRA, its collecting agent, is feared and seen as a public enemy. There, I said it!
Frankly speaking
People believe that a tax is imposed by force. Yes, there is some level of truth there. Maybe the best way to put it is, tax is a payment to the government by the public. However it does not leave the government with any liability. It’s better than force. The word “force” makes it more frightening to pay tax. In Zimbabwe, we have a self-assessment tax system. It enables an individual to assess their personal or business tax lax liability without any coercion.
Tax isn’t meant to harm people. It’s neither a form of economic punishment nor an indigenous-imposed form of slavery. Yes, during colonisation, people were forced by the colonisers to pay taxes such as hut and dog tax. However gone are those days. Taxes are now meant to develop the country. It’s a way by which governments of any state collect revenue to be used as fuel to drive economies.
As Zimbabwe, we are one country highly depending on tax revenue for survival. No industry is earning as much revenue, thus revenue is generated in the form of taxes.
My other 2 cents
I have no judgement on people who still have questions on where tax revenue goes. If this question is answered, tax non-compliance will reduce. Ideally all tax revenue must go into the government’s fiscal.
It is the money that the state uses to finance its operation. The state works in the best interest of citizens, henceforth that money must be used for public benefit. However, this isn’t always the case, as some loopholes do exist in the form of corruption. Yes, corruption has become an accepted form of evil in this country.
“Batai mari iyi mozotengawo drink”, almost every citizen now knows this statement. This entails that people find it easier to bribe than comply. This has seen many revenue collecting agents get increasingly rich and living flamboyant lives at the expense of economic development.
And so..
Taxes should be paid. It’s very certain. As a fact, majority of Zimbabweans are paying indirect taxes such as VAT as these are hard to evade. However compliance should spread to all tax heads. Imagine if every liable person would comply in paying taxes, Zimbabwe would be having a more solid tax base than it has now.
The newly introduced transaction tax has given the government more money and the public should be appreciated for that. Citizens are overtaxed in Zimbabwe. They have been stretched to comply given the hard conditions therefore appreciation should be publicly made.
However, the state should:
Educate people on the benefits of paying taxes. This will help in motivating the public in paying their tax dues.
Leaders should lead by example. Every business regardless of who owns it should pay their taxes. Traditional chief or Member of Parliament you name it, some taxes are non-discriminatory, they should be paid. One canon of taxation by Adam Smith is the fairness of the tax system. It should be fair across all people of civil divide be it race, age, position etc. This way confidence in the system will be built.
Watch of corrupt activities. These should be reported immediately as they are tarnishing Zimbabwe’s image and also delaying the pace of economic development. There are ZIMRA toll-free numbers the Zimbabwe Anti-Corruption Commission, the police to help fight against corruption.
Tax rates should be revised to make sure that they don’t sweep away all our taxpayer’s income. Given the growing levels of inflation in Zimbabwe, the Value Added Tax needs a downward revision. The current 14.5% is reducing the purchasing power of taxpayer’s income close to nothing.
Parting words
Together we can build a better Zimbabwe for us and the generations to come. Great economies like China, UK, Rwanda and SA, pay these taxes too. Its the loyalty in paying taxes that has positively resulted in their economic development. We can also achieve economic growth if we all devout to playing our part. Remember, taxes may be painful today, but once the revenue is channelled towards economic development, it yields smiles.
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About the author
Tawanda Chitura is an expert in Fiscal and Monetary Policies, Business Management, Tax auditing and Customs Management with a BComm in Fiscal Studies by NUST. Born and raised in the city of Mutare.
2 Responses
I like this article, however i think that people evade paying taxes because they don’t see any development. They don’t see how the money is being put to use. Take for example, we have tollgates but our roads are some of the most dangerous and ugly roads in all of southern Africa. People fear the taxman because evading tax payments attracts a large fine and imprisonment term. I agree that the gvt should educate the nation more on it but i also say they should walk the talk when it comes to what the money is used for.
thats the deterrence theory of taxation
people will avoid taxes as long ad there is no economic progress