Prominent Economist Chibamba Kanyama has revealed that there about 9,000 Zambians holding offshore accounts.
Mr Kanyama who is also a former official of the International Monetary Fund disclosed that the majority of these Zambians are serving in government.
He said he knows this for a fact because he personally introduced some of these Zambians to investment companies that specializes in offshore accounts.
Mr. Kanyama said the country already has companies such as deVere that handle offshore accounts.
“We have about 9000 Zambians with offshore accounts. Apparently, the majority are serving in government. I know this for a fact because I introduced them to some of the investment companies specializing in offshore accounts,” Mr Kanyama wrote on Facebook.
Mr Kanyama said he is horribly shocked at the noise that some people have created about offshore accounts when it’s the practice everywhere.
“We have tax allowances also to many foreign companies since 1994. After expiration, they closed and came with another name. You can invest offshore, earn your income, bring it back and reinvest in property,” he said.
He added, “I dealt with Mombasa Port Authority who once invested workers pension funds in Zambia and the Kenyans never protested.”
He said, “Taxes are a competitive platform globally. Mauritius is way ahead of Zambia due to these tax havens. We have many Zambian companies registered in Mauritius for this very reason. I am helping a Zambian owned company register in Mauritius. The very reason we have export processing zones is to attract foreign investors to manufacture here and never pay duty so long what they produce is for export.
He continued, “we flock to order things from Dubai by taking advantage of tax havens the country offers.”
Mr Kanyama noted that the only issue about tax havens is that many government crooks use it to steal money from citizens and hide the funds in these anonymous accounts, some of the beneficiaries are middlemen.
The issue of offshore accounts and related tax havens has become an issue of interest. I rarely imagined my conversation with a colleague would be headline news in Lusaka Times and with significant public traction.
Unfortunately, the article only captured my sentiments without the full context of the discussion I was involved in. I simply participated, like I have done a few times before, on a Facebook post by one of my young friends who wanted more information about offshore accounts in as much as it affected the political economy. The backdrop was the Auditor General report that exposed high levels of abuses to public funds.
The discussion basically involved three people and my attempt was to provide an actual definition of offshore, its implications and how such accounts benefit the country or can be abused. Through some kind of question and answer, I explained my personal experiences with offshore investments and that offshore involves making investments and deposits in foreign banks and corporations.
Many individuals and corporations have legitimately invested into offshore accounts where regulations were investor-friendly or relaxed and enabled such entities to avoid paying taxes which in itself was not wrong. For example, many Zambian registered corporations patent their own brands abroad, to companies they own, pay royalties in the foreign country and such payments are tax deductible. This is tax avoidance. Governments cannot prosecute companies for such transactions unless they capture them through a policy pronouncement as happened in the 2018 Zambian budget announcement where there is a 5% levy.
There are many Zambians who have invested into offshore accounts either through direct participation or via other investment vehicles for better returns. Pension Funds and insurance companies have for some time been requesting PIA to relax thresholds on offshore investments.
Though not aptly stated in my responses to the questions, I disclosed the problems associated with offshore accounts as some individuals and corporations use them for illicit purposes. If such activities border on tax evasion and money laundering, such individuals must be made to account and prosecuted.
In short, I never made an intentional statement on offshore accounts but merely responded to a question. My views, nonetheless, remain valid but should be captured within the context under which they were made. I am happy to engage in productive discussions with those whose intention is to share knowledge; who knows we may find solutions to some challenges associated with offshore investments because they exist among Zambians.