lot 1: Increasing tax revenues from SMEs in Zambia


Challenge Identification


How might we improve Zambia's taxation of small and medium-sized enterprises?

Only 35 of the 72 districts of Zambia offer tax offices for citizens and enterprises to declare and pay their taxes, resulting in common delays in tax payments from one to two years. Tax collection from small and medium-sized enterprises (SMEs) has been further complicated by a predominant reliance on cash as the medium of exchange and a lack of accounting records and poor bookkeeping.

The challenge was identified in cooperation with fellow GIZ projects and companies with knowledge of the local context and needs, thus identifying a challenge with a true need for innovative business solutions.

Understand


While the informal sector including SMEs has been rapidly growing in Zambia, its tax contributions to the Zambian Government has continued to be insignificant: 70 % of the VAT revenues come from 1% of the enterprises, while only 5-10 % of the revenue comes from 90 % of the SMEs. According to estimates, SMEs generate between 40 to 60 % of GDP in Zambia.

We looked into the local context of the challenge through interviews, site visits and academic research to enable the participants to create their business ideas based on the facts and needs on the ground . Learn more about taxation and SMEs in Zambia in our insights report:

Innovation Sprint


Read more about the innovation sprint where the teams developed 5 innovative business ideas.

25
participants
12
companies
5
ideas developed
2
proven business models

Business Design


2 of 2 ventures passed this phase.

Market Pilot


2 of 2 ventures passed this phase.

Business Operations


These ventures are operating: