Zambia’s Businesses, Lack Tax Awareness

As a country, Zambia aims to continue to experience significant challenges in ensuring that businesses fully comply with their tax obligations. One of the root causes is the persistent lack of tax literacy among individuals, entrepreneurs and SMEs.

Many businesses are registered with the Zambia Revenue Authority (ZRA) without being given adequate education on the different tax types and their obligations, as this has seen many businesses having complex and complicated tax models.

This gap in knowledge means that a large number of businesses enter the formal sector without a clear understanding of how taxes such as VAT, PAYE, income tax, turnover tax and withholding tax actually work.

As a result, non-compliance becomes such a widespread factor, and its not always by choice in deliberate designs, but oftenly its due to proper lack of tax information.

Unfortunately, this situation leads to unnecessary penalties, discourages formalization and contributes to a strained relationship between businesses and tax authorities.

However, it is important to recognize that a compliant tax base requires not only enforcement but also proactive education and support, ZRA has a department for tax education but very little work is being done out there.

I therefore call for stronger investment in tax literacy and education programs from simplified guides in local languages, to mandatory orientation sessions for new business registrants, and regular outreach through associations, market structures, and digital platforms.

By building a stronger culture of understanding, tax structures, Zambians and Zambia as a country can enhance compliance, broaden the tax basket base and reduce the perception that paying tax is a burden rather than a civic responsibility which promotes socioeconomic development.

Ultimately, tax education is not just about compliance factor, but it is clearly about creating a fair, transparent and growth-oriented business environment.