Action Aid Zambia has observed that tax avoidance by multinational companies that are operating in the country was rampant and widespread.
Country Director Pamela Chisanga disclosed that following her organisation’s revelation of alleged tax avoidance scandal by Zambia Sugar, many informants have come out to testify of tax avoidance bordering on tax evasion by many companies in the country.
Ms. Chisanga told ZANIS in an interview in Lusaka today that Action Aid would name other companies that were involved in tax evasion but will have to verify this information before doing so.
She has since urged government to tighten up its regulatory roles in order to seal all the loopholes being used by companies to avoid paying tax.
She said the country has the potential to generate a lot of resources to finance most of its developmental programmes but this potential was being stifled by companies that do not want to meet their obligations.
Ms. Chisanga said government only needs to put in place systematic measures to curb tax avoidance.
She has since urged government to also review tax codes in order to do away with those (codes) that do not favour the country and which the multinationals were using to avoid paying tax.
Ms. Chisanga said while it was good to have foreign direct investment and a conducive investment climate, the country must not take on board legislation that encourages foreign nationals to exploit the country’s resources.
Meanwhile, Ms. Chisanga has praised government for introducing a new law that allows the Bank of Zambia to regulate and monitor foreign exchange flows in a bid to curb tax avoidance by multinationals that are operating in the country.
Finance Minister Alexander Chikwanda recently signed statutory instrument number 32 of 2013 that will take effect on 16th May this year.
The objective of the statutory instrument is to monitor the balance of payments in a transparent and accountable manner.
Ms. Chisanga said her organisation welcomes any measure that aims at curbing tax avoidance by companies that have invested in the country.
She said the introduction of statutory instrument number 32 was a good move that will bring some control on how money moves in and out of the country.
Ms. Chisanga however stated that the new law was not very effective as it only targets small enterprises that are operating in the country rather than the big multinationals.
She said the new law also has the potential to encourage illicit trade in foreign exchange.
ZANIS
It is a world wide problem and not new to Zambia. Lets learn to put things in perspective. Remember Star bucks in UK
That ugly building should be put down!
They should just fix those hanging fittings and paint it.
The Govt through ZRA should with immediate effect introduce monthly filing of the income and expenditure returns.This in will enable the government to monthly audit the expenses of all the companies and compare them with the year end declaration.I 100% agree with action aid.
Action aid should be the new zra, the stipets at zra are doing notning for this country.
Chi colour
Both tax avoidance and evasion point to two things. First being exorbitant tax rates and the second is poor accounting systems in place. You will pass as many statutory instruments as you want but the situation will continue deteriorating unless you seriously address these two problems. ZRA board, management & staff are responsible for this by misadvising the GRZ to charge high rates for their selfish interests so that people can either bribe them or their property confiscated for ZRA to loot. Its amazing to find huge number of property seized by ZRA for failure of people to pay duty & taxes on them & this is making citizens poorer than before. Many businesses today still issue hand written instead of computerised receipts & these are the ones used for tax assessment. This era, are we…
Tax avoidance is not a crime. Ask any businessman. It is the norm world wide. Action Aid is therefore misleading the nation by trying to confuse the two. I have noted that the Zambia Sugar report specifically mentions that the company was limiting its tax liability. This is as it should be. I would be annoyed if I was a Zamsugar investor and found out that managment was paying more taxes than it should be. If anything, Action Aid should be pointing out the loopholes being exploited by multimationals so that they are fixed, instead of targeting law abiding companies.So far, Action Aid has not mentioned which tax laws have been abrogated
Tax avoidance is not a crime. Ask any businessman. It is the norm world wide. Action Aid is therefore misleading the nation by trying to confuse the two. I have noted that the Zambia Sugar report specifically mentions that the company was limiting its tax liability. This is as it should be. I would be annoyed if I was a Zamsugar investor and found out that management was paying more taxes than it should be. If anything, Action Aid should be pointing out the loopholes being exploited by multinationals so that they are fixed, instead of targeting law abiding companies.So far, Action Aid has not mentioned which tax laws have been abrogated
Apologies for the double posting. The first post had two typos
Tax avoidance is having smart accountants and pleasing to shareholders – including in companies where the government has shares through Zambia Copper Investments. Tax evasion is a crime.
I love Pamela Chisanga….Continue hammering the multinationals. We need people like u and please partner with Fred M’membe to expose these companies. Isn’t it high time we saw some development????
How about we nationalize all the mineral resources and stick it to all these bad bad investors? ZCCM, that was a smashing success so let’s repeat that winning formula.
an exerlent observation by action aid , how iwished the government opened its ears to such worth ccontributions and act on them to better our economy.