THE Zambia Development Agency (ZDA) director general erroneously drew US$60, 000 (K360, 000) from Government funding apportioned to the Agency as additional monthly earnings from May 2011 to October 2013, the Auditor General Anna Chifungula has revealed.
Ms Chifungula said a scrutiny of the contract for the ZDA director general stipulated that he was to receive donor funded monthly income amounting to US$2, 000 in addition to his salary.
In her Audit report on the accounts for Parastatal bodies for the financial year 2012, Ms Chifungula said that clause 5.2 of the director general’s contract exempted the additional monthly income from Pay As You Earn (PAYE) tax.
“The exclusion of that portion of his emoluments from being taxed is a contravention of CAP 323 of the Laws of Zambia, Income Tax Act schedule II, which does not include such incomes and such officers among tax exempt incomes and office bearers,” the report said.
She said the US$60, 000 incomes drawn between May 2011 to October 2013 was paid to the ZDA director general without deducting and remitting PAYE to the Zambia Revenue Authority (ZRA).
A break-down of the earnings showed that the ZDA boss was paid $16, 000 for eight months from May to December in 2011, US$24, 000 was paid from January to December 2012 and another 10 months from January to October 2013 covered a total payment of US$20, 000.
She revealed that although the contract stated that the director general was to be paid the additional monthly income from donor funds, there were no donor funds received during the period May 2011 to October 2013.
“Consequently, the Director General was paid from the ZDA funding received from Government and no taxes were deducted and paid to ZRA,” the report added.
The report said the ZDA owed the ZRA in unremitted statutory obligations totalling K11.8 million as of December 2012, while K48, 576 was owed to the National Pension Scheme Authority (NAPSA).
It added that contrary to financial regulation number 52, 42 payments involving K749, 400 made during the period under review were not supported by relevant documents such as receipts and invoices.
Ms Chifungula said 2, 441 institutions owed NAPSA K1.3 billion in unpaid contributions as at December 2012.
She said the amounts were outstanding for a period of 134 months and that included in this respect were amounts of K785, 540 involving nine institutions that had ceased operations and K1.6 million involving 48 institutions whose locations were unknown.
It’s theft!
The problem was the accountant who did not deduct PAYE nothing here.
So ZRA should close in on the government their employers. Hilarious.
Accountant thought $2,000 was below the Tax free threshold of K3,000.
So he gets all that money while I am here starving???
Your starving has nothing to do with the money he was getting? Did you stop starving in November, 2013 after he had stopped receiving the money? No? Exactly!
What he did was wrong and should be condemned but it does not give excuses to able-bodied people to starve.
This is where the money goes, when collected from toll gates
ZDA not RDA boss.
Can a country develop with kind of behaviour? This make a sad reading. Zambia is not a poor nation corruption is making us looks like a poor country. 50 years down the lane and we are still stagnant.
Clear case for ACC to quickly move in and investigate with a view to prosecute the ZDA DG. Please ACC be proactive and move in. I say MOVE IN and arrest the DG for interrogation!
He is not fit to hold the position if he fails to show leadership in such sensitive matters. Couldn’t he wait for the donor funding to come in as we all do? Why was he in such a hurry? Didn’t his staff advise him that donor funding had not been remitted? He has to refund that money period! Why is Zambia so unfortunate to have selfish people at all levels of leadership? No sacrifice at all! Shame on DG.
He knew all along.
He did it deliberately
It is a clear case of theft.
The Auditor General is working so hard but at the end of the day, nothing happens to those who steal our money. Because of this, stealing will continue because everybody knows that even if you steal, you will just appear before the Parliamentary Committee on public funds and everything will end there. This is a mad country indeed. Surprisingly, law enforcement agencies are too quick to go and arrest Dr Nevers Mumba for meeting chiefs. Is there logic in this country? Then again you turn to this f00lish PF government, what you see is total disregard of human rights. How does a sane government disrupt worshipers in church and demand that they get permission from the police? That bitch Stella Libongani will pay for this mess. You cant continue arresting people on flimsy charges. Stupi.d police
Mwa SATA kuwayawayafye
This is shameful but not at all surprising. Read ‘Why Nations Fail’ (Acemoglu & Robbins). These things you are reading about here have been articulated so well it is amazing when you see them at play in real life. Also, consider Gladwell’s considerations in ‘David and Goliath’; again you see how Zambia’s leadership, in playing Goliath, is being slain by small Davids every day! Like ‘Animal Farm’ these accounts give you a good education of the mess going down in our beloved country, among others.
We need a new constitution to help close such loop holes. Its virtual everyone stealing in Zed. That’s why Zed is weakening too many parasites.
What will disappoint and disillusion you is that most of the statutes in your CURRENT constitution are either not applied, or misapplied at best. It is not the constitution that will change matters. It is a change of mindset, attitude, and a deliberate claim to hardcore discipline. The discretionary privilege that leaders award themselves has a latitude that is only common in countries with similar weak and poorly performing institutions.
If you can’t discipline or punish such character how can misuse, misapplication and misappropriation be reduced or stopped? Putting the such Auditor General’s report without appropriate action is tantamount to foolishness and our country cannot develop quickly and robustly. Get this chap to account.
You know why the Auditor General’s report do not go anywhere? I have followed their audits including the institution I work for. They are so quick to go to the media without analysing issues.
If there is an agreement that this man gets that portion of income tax free there is no problem with that. The law is very clear, if the employer does not tax the employee, the employer will pay tax instead. The salary will be non allowable deduction from their income when paying corporate tax. The act is silent on the govt institutions.
We just need to deal with the employer ( Government for coming with such incentives as voters) As for the Director General at ZDA he must be laughing in his bedroom. This is not even an ACC case. Pse be enlightened.
@Kavuyi, what agreement are you talking about which the Auditor General’s Office failed to acknowledge? This is your own imagination. There is no such agreement that if Donor money doesn’t come in on time, the DG has to be paid from institution funds which are not meant for that purpose. This is pure misappropriation of public funds and a case for embezzlement. Get enlightened yourself!
I don’t understand what theft, need for new constitution or corruption that some people have seen. The DG has a contract with GRZ and the contract provides for him to be paid $2000 a month tax free on top of his salary. He did NOT draw up his own contract and he is not supposed to be the person to look for donor funding. Where is he supposed to get money owed to him from? Why should he wait for his salary when he has personal commitments? Who is at fault? The government should have just regularised his contract to account for lack of donor funding. In my view the main problem appears to be that the payscale was probably too low for the person appointed and GRZ had to find a way of meeting his pay demands. It happens in business.
A contract can very easily be drawn in contravention of the law. Finish and klar. Not a very good argument there…
Kal, I agree with you that a contract can be drawn up in contravention of the law but in this case, it was not. This was a tax free element to his salary, and any taxable component therefore, falls on the employer.
He erronerously drew $60000 so was him who initiated that error for ACC to start following him up or was it the system itself. I don’t see any fuss in this matter.
“”was to receive donor funded monthly income amounting to US$2, 000 in addition to his salary.”” I QUOTE.This is clear.ONLY FUNDS FROM DONORS SHOULD HE DRAW AN EXTRA INCOME.please employe qualified accountants who understand and can interpret employment contracts.These quacks you employe in GRZ are easily bribed by bosses because they are not qualified.
ACC arrest the ***** that is theft what are you waiting for?
Authorization from …
where is general Miyanda this are issues we need him more not Sim cards he should interpret this and take one to task
How about yourself isn’t your money as well. ..you are the selfsame people who insulting him.
Too much waste….how on earth can this sheer recklessness go unchecked?
Seriously in America he would be in Jail by now,there is no employee who is exempted from PAYE unless you fall below the threshold.Only the President enjoys such incentives.
In this day and age..in broad day light..How can the Finance Manager and his Management spend K750,000,000 of public funds without supporting Receipts and Invoices???? So how did the Finance Manager authorise and sign these Cheques???…. imwebantu!!!!
Sad reading indeed can Acc do something on this one please
How can the country develop when the Bastard heading the Development Agency is developing himself before the country?! And, why quote his salary in US dollars; this is Zambia, all transactions should be in Kwacha!
Vote for me and this nonsense will be a thing of the past. Bums like this will be lynched in the street
Sometimes, salaries are quoted in US$ or another currency as insurance against Kwacha movements. If an organisation (GRZ) want to employ a particular person (assume it is a Zambian working abroad) and the person has financial commitments in the country they are working in (assume a mortgage) the person can ask for his salary to linked to, or quoted in another currency to safeguard his interests and ensure that he is not disadvantaged by taking up employment offered – he is not a charity. It is up to the employer to agree or disagree to the pay demands of any potential employee.
Kavundula…….
No. We cannot vote for someone who will authorise suspects to be lynched in the streets.
We cannot have more than what the PF thugs are dishing out to us (not all PF members are criminals like Kudos, Gen, and Haleisa Haleisa though. There are many good people in that party). I cannot imagine the Gomorrah that will occur today if the President were to give the go-ahead as Kavundulais suggesting. No. We want a President who will respect the law.
Manlove you are no different from the DG at ZDA; selfish through and through.
If the DG’s contract states that the US$2,000 is exempt from Tax and we know that Tax Law does not allow that, then what it means is that it is ZDA which has to pay the Tax. You can not blame the DG who is a mere employee. An employer can decide to pay tax on behalf of an employee and that is not illegal. Emoluments can be stated “net of tax” and so this is such a case. Further, the fact that there were no Donor Funds available is also not the DG’s problem. What should be questioned is the validity of his contract because it may have some irregularities on the way it was drawn. I agree that the US$2,000 from Donors and the exemptions from tax are “strange” contractual provisions. If the DG misled those who approved his contract by inserting illegal items then he should be brought to…
The DG was aware, The finance manager must have briefed him that donor funds meant for his tax-free top-up were not in. The two omust have agreed to pay from available funds and recover when the donor monies became available. I am more than certain this item even reached the Board as a “house-keeping” issue for noting only and the board passed it. It is this cultural thing of not respecting public funds that has made stealing from the public a normal act. It would never have been if it was in a privately owned entity, commercial or not for-profit entity. Tax payers must start protesting more at the misuse of their money!!!
@NBR. The issue is DG received money which was not from donors!
Trust me this is no secret. There must be tones of board papers approving the DG’s pay from Agency funds with a view to replacing it when the donor funds are received. Did you guys honestly expect the DG to go without pay for years just because the politician have not sorted the Donor funding? Nonsense!
The Auditor General, or is it just bad reporting, has only given us one half of the story here.
You are right let me say, you can see the guy is only interested in getting paid and greedy he knows it’s not donor funds yet he decide not to pay tax, donations are tax
Exempt but not government fund and someone was not doing their job securing donations
Anna deserves a pay-rise! Please name and shame this Director General. He knew that he should have been paying PAYE but chose to do Don’t Kubeba. White colour theft at its best!!!
Ms Chifungula for president in 2016 mwee. Tulechula saana. we need a person like her to lead us.
or minister of finance not Chikwanda