Tax on Phone: tax payment via SMS


Some Zambian provinces lack tax offices for citizens to declare and pay their taxes. They often need to travel long distances to reach the nearest office, resulting in common delays in tax payments from one to two years. This also concerns tax payments from small and medium-sized enterprises (SMEs). 

TaxOnPhone is a mobile and electronic tax system that simplifies tax declaration and payment for SMEs. The system links the online tax platform of the Zambian Revenue Authority (ZRA) to the existing mobile networks in the country. With any kind of mobile phone and via interactive text menus (using USSD technology which removes the need for any internet connection), TaxOnPhone allows fast and cheap access to ZRA services, such as checking the tax status, register for a Tax ID, declaring and paying taxes, proving tax compliance and more. For the ZRA, tax collection is simplified and their coverage is extended throughout the country.

 

Business Model: 

ibes AG installs and implements the system for the Zambian Revenue Authority (ZRA).

 

Current status:     

The core system was installed in September 2018, the first module for tax returns went live in January 2019. The module for receiving Tax IDs went live in May. Since then, 100 taxpayers register daily, which allows the ZRA to collect 20.000 USD via the TaxOnPhone system per month. As of December 2019, 10.848 taxpayers have registered and are now actively using the system.

ibes AG invested €200.000 and plans two extensions to the system: The taxes paid via TaxOnPhone will be extended to include sales tax as well as payment via a mobile wallet will be added to the payment options. The technical concepts and feasibility studies to expand the system were developed. As soon as the necessary resources are available, the extension can be implemented practically.

 

Expected impact: 

Increasing tax revenues paid by SMEs in Zambia, simplifying and expanding tax collection for the ZRA, enabling citizens to pay taxes more efficiently and cheaper by not needing to travel to a tax office, simplifying tax payment due to the reduced tax forms for use on mobile phones.

 

Team:                     

ibes AG, Zambian Revenue Authority (ZRA) 

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