Increasing tax revenues from SMEs in Zambia

Solving Zambia’s Taxation problem in just three days?

Adults playing with building bricks, tinker telephones from memo pads, reenact scenes from a bus ride – and therewith find five solutions to Zambia’s taxation problem in the first lab of tomorrow innovation process.

Thomas Rolf underlines: “This is an experiment. We want to solve the problem of a partner country of Germany together with the private economy – by the means of new business ideas. Maybe we have to tear down mental walls in the next few days.” The venue for the event is more than suitable: At the East Side Gallery in Berlin, the retaining part of the Berlin Wall, the vice manager of the department “Collaboration with the private economy/corporate responsibility” opened the first lab of tomorrow innovation process in the beginning of December 2015. The creativity of the around 30 participants, including small and medium-sized enterprises as well as large companies such as SAP, is ensured in the next three days: pens and numerous crafting tools are distributed in boxes all around.

The lab of tomorrow is a new GIZ approach to mobilize companies for developmental problems. "Shared value" is the idea behind it and means all approaches that increase the competitiveness of a company while improving the economic and social conditions of the community in which it operates. The lab of tomorrow is one of the innovative formats for cooperations with the private sector, which the Federal Ministry for Economic Cooperation and Development (BMZ) called for through the "Strategic Partnership for Digital Africa". The greatest strength of the lab of tomorrow process is its methodology: The "design thinking" method, which is also used by companies like Google, Apple, or IBM to develop new, innovative products.

Errors welcome

The challenge of the first lab of tomorrow innovation workshop in Berlin is: How to improve the taxation of small and medium-sized enterprises in Zambia? In Design Thinking, the developed solution is completely geared towards the user. And since five high-ranking tax experts from Zambia are among the participants in addition to German entrepreneurs from various industries and GIZ employees, the solutions are constantly being reconciled with the local conditions. The expectations of the Zambian experts are high. Berlin Msiska, head of the Zambian tax authority, said at the beginning: "The result of this lab must be an approach that we can test in our country." He and his colleagues look critically at the five teams over the course of the different development steps and question their prototypes: Is it possible to increase the motivation for taxation through incentives such as bonus programs? Are the foundations in the country to register taxpayers by purchasing a SIM card? The initial fallacies help to better understand: time and again, ideas are overworked, rejected and sharpened - until five promising concepts were put to the table.

© GIZ / Fotograf: Paul Hahn
© GIZ / Fotograf: Paul Hahn

Experiment succeeded!

The final presentation triggers Msiska's enthusiasm: "Great ideas! The results of the workshop are impressive. We are going to test the prototypes in Zambia - and I already know now that we can come to grips with our problem of taxing small and medium-sized enterprises. "
And how will it continue? Eight companies immediately pledged to accompany the testing in Zambia from February on. The testing will be pursued in consortium. It is also possible to finance the emerging projects through a Multi Donor Trust Fund. The consequence is that real businesses emerge from the idea developed. "The experiment was successful," says Thomas Rolf after the first workshop, "and we are delighted that the lab of tomorrow has the power to win entrepreneurs and at the same time to create effective solutions for our partner countries."

© GIZ / Fotograf: Paul Hahn
© GIZ / Fotograf: Paul Hahn
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