Tue, 04 Oct 2016 09:28:58 +0000
ZAMBIA is losing a lot of money through the externalization of foreign exchange by some companies and individuals and this is the loophole that the Ministry of Finance should seal if Zambians are to benefit from foreign investment, says the Petroleum Transporters Association of Zambia (PTAZ). PTAZ secretary general Benson Tembo said the versatility by the new Minister of Finance Felix Mutati in understanding the operations of both public and private business institutions was what the country needed to curb illicit financial flows robbing the country of millions of Kwacha which could have been channeled to other needy areas.
Mr. Tembo said the stakeholder consultations which the ministry had embarked on was a step in the right direction as it will expose certain ills that certain corporates were involved in. The action will rectify the problem, thereby enhancing the revenue collection base and easing Government’s expenditure burdens which have hampered its efficiency.
He said there was no justification for companies registered and doing business in Zambia to continue externalizing their profits while leaving the country in which they make their money bankrupt.
There was need to come up with a water-tight mechanism to ensure that companies paid tax accordingly, unlike the current situation where firms allegedly continued to alter their documents in order to avoid paying correct tax. He said PTAZ expected the Ministry of Finance to be more proactive in revenue collection as that was the only means through which the country would fund projects, adding that there was need for closer ties between Government and whistleblowers so that financial irregularities did not continue to go unreported and sealing all loopholes that firms were using to steal from Zambians. He said the local transporters were dismayed that there were companies in the oil industry which had employed Zambian drivers yet were paying them from their countries and wondered how such individuals could be paying Pay As You Earn (PAYE), adding that such activities should be investigated and stopped because they were retrogressive.
“Zambia is losing a lot of money through bogus companies which are externalizing their profits, thereby leaving the country with nothing from the businesses operating here and these are some of the loopholes that should be identified and sealed if we are to realize what the country has been losing over a long period of time. ‘‘It does not make sense for example that a company which is registered and operating in Zambia should be paying its employees from outside the country.
How will the employees pay tax? “As an association, we are very happy with Mr. Mutati’s versatility in his quest to improve the economy by engaging stakeholders in finding solutions to challenges that we are facing as a country and we are ready to engage with Government in whatever way we can to ensure that businesses do not continue reaping our resources yet eluding various taxes that should create the revenue base for the country,” Mr. Tembo said.
He said there was need to come up with punitive measures that will ensure that every business operating in the country paid tax accordingly. “In most cases, what we have are altered figures of what companies are getting and this is the challenge we have to overcome to ensure that all companies pay tax accordingly,” he said.
