Tax Incidence Analysis in Zambia

Evance Moses Silumbwe, Mubanga Mpundu

Abstract: This paper views different methodological issues concerning tax incidence analysis. It is part of the fundamental and broad - based review of the Zambian tax system that is being planned by the Ministry of Finance and National Planning through the Zambia Revenue Authority. While the major objectives of an efficient and effective tax system should be to raise required standards of revenue with minimum cost and with the least distortion of the economy, it is also vital to sensibly examine the distributional impact of a country?s tax and expenditure systems. This is important to ensure that the marginal tax rates faced by domestic producers are not excessive and discourage productive investment and growth.

Keywords: Taxation, Tax shifting, Progressivity, Regressivity, Hypothetical tax, Counterfactual Hyperinflation