TRANSPARENCY International Zambia (TIZ) says revelations that the former Minister of Finance and National Planning Situmbeko Musokotwane gave Pepsi Cola Company a K10 billion tax holiday is an indication that leaders in the former administration had no fear of the law.
TIZ president Reuben Lifuka said former Government leaders broke the law with impunity as they believed they would be in power for a much longer period.
Mr Lifuka said this in Lusaka yesterday when he featured on ‘Let the People Talk’ programme on Radio Phoenix.
He said former Government leaders who abused their authority or misapplied funds should be prosecuted.
Mr Lifuka said there should be no sacred cows, and that those who broke the law should dance to the music.
He said no one should be immune to prosecution when enough evidence is presented.
“Those who flout financial regulations should be prosecuted. There should be no sacred cows,” he said.
Minister of Finance Alexander Chikwanda said he is not ready to comment on the matter now.
“I will only issue a comprehensive statement after referring the issue to the relevant organs of government such as the Attorney-General’s Chambers and Cabinet,” Mr Chikwanda said.
When contacted for a comment, a Pepsi Cola Zambia senior official, who did not want to be named, referred all queries to the company’s chief executive officer, a Mr Shankar.
“I have seen the article in your paper but the best person to comment on this matter is Mr Shankar who has been named,” he said.
Mr Shankar’s mobile phone was off the whole day yesterday.
Zambia Revenue Authority Commissioner-General Berlin Msiska said he is unable to comment on the Pepsi tax rebate.
“I am still settling down and I do not have enough information on the matter. It would be inappropriate for me to comment,” Mr Msiska said.
And Trade Kings Limited, a local manufacturing company says the tax holiday incentive is open to irregularities and abuse by certain companies, especially foreign.
Company corporate affairs manager, Bright Chunga said in an interview in Lusaka yesterday that some foreign firms have closed their companies after the expiry of the tax holiday incentive.
“I recall at some point, Government gave some furniture shops and others dealing in suits a tax holiday but most of them left after the expiry of the period. So this incentive can encourage irregularities,” he said.
Dr Chunga said since the establishment of Trade Kings in 1995, it has not received a tax holiday.
“Trade Kings has never ever been given a tax holiday since inception,” he said.
He said the investment licence is the only tax holiday which applies to every established company.
Dr Chunga said the Investment Act, stipulates the types of tax holidays that apply to various investments.
“I know of a tax holiday which applies when a company invests over U$500,000. However there is another type of holiday which is discretional. This is what the investment Act stipulates,” Dr Chunga said.
The Daily Mail has revealed that Dr Musokotwane authorised a K10.8 billion tax holiday to a company that produces Pepsi Cola in Zambia.
But Lifuka lisaka uyu mudala.Who has the power to give tax reliefs? Magande did the same.I now know why this Lifuka and that Lungu used to speak very much as anti-MMD…they were infact PF stooges.How can a President of a corruption NGO second allegations from Sakeni(who is neither an economist nor tax expert) on tax relief?That’s why those in the know like Chikwanda and Msiska refused to comment cos its already an embarrassment in the making.
This one will be interesting. Talk about abuse of authority. I would understand if the actual PepsiCo were given the break, not the distributor.
Dr. Musokotwane please clear the air on this issue. To a lay-person, the deal is interpreted to mean Pepsi collected money through VAT on behalf of govt. Instead of this money going to govt for provision of goods and services for the collective benefit of citizens, Pepsi uses this money for its expansion programmes. This means Pepsi is financed by Zambian tax payers.
Rightly put my dear and so painful, I am so wondering why Musokotwane and Mumba are not remanded in cudtody right now! I just hope Sata will have more courage to finish off these people than Mwanawasa!
Another nonsensical witch hunt. This govt has a lot of time on its hands for this type of idle talk. Anyway there is a market 4 it in poverty and iliteracy stricken Zed. Dr Chunga has actually hinted that there is no case here (All he wants is that local firms should enjoy the same incentives). Tax holidays under the Investment Act are given to firms that invest more than $500 000 (Pepsi invested $40m). Other tax holidays are DISCRETIONARY (upto the Finance Minister to decide)!
@2 Character Asassin 00. There is nothing interesting in this accusation except for the levels of ignorance and stu.pi.dy. I pity Chikwanda who has to clean up the rubbish been spilled by the mo.r.ons in this PF govt. Too many accusations that dont end up in prosecution only result in denting the image of govt!
‘@3 How does this have to do with the govt ? is TIZ part of the govt???
@4 Seventh Day Adventist. It seems you are out of the loop. Reuben Lifuka has commented in the light of the accusations by Home Affairs Minister Sakeni that he has ‘ordered’ the police to investigate Dr Musokotwane for ‘tax evasion’ and ‘breaking the law’ by giving a tax holiday to Pepsi Cola! Sakeni has also requested ZRA to cooperate! My dear it is as stu.pi.d as this!
Chikwanda should resign if he wants to keep the little of what is remaining of his integrity. Otherwise his job seems to be that of cleaning up the vomit from his boss’ office. There is no case here. Even the current government will give tax holidays where they deem fit. Bicycles!!! Result: Nothing. Double Salary!!! Result: Nil. Tax Holiday!!! Result: Nix. Ba fee coulour. Poor Finishers.
#3 Mind You
How does VAT comes in? I thought Sakeni was talking about the Tax Holiday given to Pepsi Cola? Cos as I am understand a Tax Holiday is period during which a company is exempt from state taxation, e.g. when just starting out in business(period of no taxation) and certainly this does not include VAT which is paid by the consumer and NOT the producer.
The law (Investment Tax) as it stands allows the Minister to give tax incentives. Why did PF not see an issue when tax incentives were give to the mining companies? The investment act allows the minister discretional powers to offer tax incentives…
Its clear this government has no work to do rather than just alarm the nation on corruption which is not there… do the have a legal advisor?
spot on.we are paying for poeple’s ignorance on Taxation and Investment Act that some pipo dont understand.Tax holidays are there be it foreign or local even a Treet Vendor can get one provided he/She fulfils requirements.
My knowledge is scanty in company tax gymnastics, but Musokotwane may be paying for hiz “insults” with regard to Sata’z revelationz about “fake money” printing by the MMD. He should have taken a more sobre approach when reacting to the allegation.
Imwe bafikala explain properly about this subject or else just shut up. Foools.
@THE ONLY LIVING JAY
Your approach of staying quiet in the face of ignorance and tyranny might work for you, but not for other people. We are all Zambians together and no one has more right to blacken another’s name and legacy without just cause. Tyranny is tyranny, even if ba-fee-colour are baying for somebody’s blood. Somebody has to stand against tyranny. We will soon be in dire need of somebody with a Mandela/Gandhi/Martin Luther King Jr integrity to speak up against id!ocy. Dr Musokotwane please do not give up. If you did right, the truth will set you free in the face of unmitigated tyranny.
I think most of you chaps commenting here havent followed the story. Pepsi was given holiday against remitting VAT and Excise duty duly collected from their sales. Tax incentives are given on Corp Tax, VAT on imports, Input VAT etc. But VAT is not a business expense hence whoever collects VAT should in turn remit is to ZRA period. No wonder Dr. Musokotwane has kept quiet on the issue.
Musokotwane got a cut from this deal, that explains his wealth…….so we zambia are still buying Pepsi product as same price as Coke when these ludicrous guys dont pay tax…Please arrest them….
Yes, we want zambia to standup and develope, than have thieves stealing with impunity we canot allow that to continue, things need to be put straight if zambia shall flourish again ,follow them up i know the culprits are having it tough what a joy
PF, stupidly, are raising Musokotwane’s profile. These guys have no future in Zambia’s politics. If they think the next elections will be walk-over they’d better think again. We are now getting fed up with all this. So again here I see potential embarrassment for PF. I’m afraid that President Sata blundered hudegly by surrounding himself with advisors who have the IQ of a Grade-1 drop out.
Ignorance is probably a curse. There’s no wrong doing here. #4 Musiwa, #9 Engineer and a few other enlightened brains on this blog have explained very well. It is very sad that Zambia is full of illiterates. At least on LT blogs anyway.
Countries compete to attract foreign investment. They offer incentives like tax breaks etc. These incentives are an investment by the State. The benefits are employment creation and tax revenue that you would never had if those companies never operated in your country. Remember, Pepsi could have set up the business in any other country.
What is the issue here,is it the tax holiday or the non remmitance of VAT? i hope this is not another hot air from PF
But SATA and his cadres have really managed to divert our attention.That what happens when you have uncompetent manager,he/she always bring in irrelevant issues to try to hide they weakness.
its better to run the government without these irrelevant politicians.if we can manage Chief justice and technocrats and traditional leaders it will be better.not these crooks
@ Belemu
You are very right, us taxpayers have been financing pepsi through the vat not remitted to goverment, its a totally strange incentive. It seems most of the bloogers cant grasp a simple thing no wonder we are not developing as a country, we need to change our curriculum.
I dont think VAT is part of the 10 Billion
Bushe mkwai, njipushe ko, bushe Situmbeko alikwata PhD….elo yakwisa???? Pantu ch’kala uyu lisaka sana!
My understanding is that Pepsi was given a go head by Mr Ruphia and has some shares in Pepsi Z\ambia. Everyone in the police, intelligency and Judicial circles are aware of this. Pepsi wouldn’t have started operating in Zambia as fast as it happened. Im amazed to learn that K10.8BILLION was rebate for Holiday. It is no surprise and I wonder why some brainless individuals on this blogg think this is witch- hunt. Investment tax has a blanket and this means it is measured against any development in relation to its job creation. If there are no job creation this tax incentive is stopped. This crap is not even in UK, USA or Europe.
Lifuka will become more and more irrelevant as long as he continues to fail to extricate himself from Fred mmembe.
You dont just say everything that Mmembe says toherwise people will be quite happy to listen directly from mmembe. No need for an intermediate, is there?
lifuka needs to stop working as an agent of another orgainsation, the man needs to show society he has his own balls….not mmembes.
Here are the facts: Pespsi, which was facilitated into Zambia by RB, who is a close friend to chairman of VB, the Indian franchise holder of PepsiCo applied for a 10 year excise and VAT exemption (meaning they would start paying back the collected excise and VAT from year 11 to year 20). The committee rejected. Later, Dr. Musokotwane was instructed by State House to go ahead and give a 5 year break of not remitting excise and VAT. Pepsi’s hidden reasoning was to penetrate the market against Coke through pricing. KO does NOT enjoy the privilege and that is why it pays 93 percent of excise for soft drinks despite controlling only 62 percent of market share.
sorry, KO is short for The Coca-Cola Company.
TIZ, a subsidiary of PF, what do you expect from Lifuka, a member of the constitutional “expert” team?
This is simple taxation…let the accountants from CBU who do zambian taxation and not these acca, cima chaps who do british taxation explain this. This is legal and provided for in the Income Tax Act of Zambia.