ActionAid Zambia has said that it has been falsely in some sections of online media that the organisation was calling calling for the arrest of certain individuals. In a statement made available to the media, ActionAid Zambia Director Nalucha Ziba said that her is a non-partisan organization, adding that ActionAid Zambia is very objective in all their work and that many people can attest to the fact that they have been very consistency calling for fair taxation of all.
Ms Ziba further said that in their earlier statement issued on the Paradise Papers, ActionAid Zambia did not mention any individuals or call for their arrest.
“Our position was clear- we called for an investigation by the Financial Intelligence Centre (FIC) on any illegal financial transactions relating to offshore accounts and tax havens by public officials, High Net Worth Individuals, Corporates and Politicians,” read the statement.
“Our stance is that any illegal financial transaction should be criminalized as a lot of tax revenue is being lost by such, ” the statement said in conclusion
Below is the full statement .
MEDIA STATEMENT ON PUBLIC EXPENDITURE AND TAXATION
Members of the Press
ActionAid Zambia as part of its mandate to ensure that public resources are expensed for the benefit of the Zambian people.
As an organisations that is concerned with the alarming increase of misapplication of funds as evidenced in the 2016 Auditor General’s Report on the accounts of the Republic of Zambia Auditor General’s Report for the Financial Year ended 31st December 2016.
The accounts of misapplication of funds raised in the report affect the majority of Zambians as public service delivery is compromised and is evidence that Government is not prioritizing the immediate needs of the people.
Coupled with massive misappropriation of funds by public officers as revealed by the Auditor General’s office, the government has up to date not put in place strong internal control measures to ensure accountability.
As an institution that advocates for citizens needs to be turned into capabilities and EQUALITY for all Zambians, we feel compelled to comment on these issues and many other revelations made regarding the public procurement system and taxation.
We note with dismay that the provision of public services to the needs of the people of Zambia is being undermined by a few individuals that have decided to take advantage of the weak government structures by misappropriation of public resources.
Therefore, we would like to concur with Finance Minister Felix Mutati that all those found wanting in the Auditor General’s report must be prosecuted and pay back the money they have “stolen”.
We demand answers and governments commitment to ensure that the law enforcement agencies will bring the culprits to book. The crimes committed by a few selfish individuals should face prosecution despite existing loopholes in the Public Finance Act.
We therefore call for the immediate arrest of all public officers cited in the Auditor General’s report as this is an injustice to the tax payers and to the citizenry at large.
These resources, if expensed on need and priority would have led to the improvement of lives of many Zambians who are wallowing in abject poverty.
We note with sadness that despite the increase in misappropriation and misapplication of public funds as evidenced by the trend in the AG’s report of 2014, 2015 and 2016, we evidently have a weak public procurement system that has resulted in questionable contracts being awarded for the provision of goods and services to government.
We would like to implore government to put in place stringent measures that will call for increased accountability and transparency in the public procurement process. This measure will in turn enhance effective resource distribution.
Members of the Press
It is ActionAid’s appeal that our leaders be held accountable for public resources and exercise transparency in all these processes. The secrecy surrounding expenditure and procurement has led to erosion of trust of our leaders and this has an effect on effective delivery of services.
These misplaced priorities has led to many people being unable to access the basic services that government should provide, such as proper school infrastructure and learning materials, health care services and safe and clean drinking water to mention but a few.
As an institution we shall continue to observe these undertakings by government and call on all Zambians to demand for provision of public services.
Like we have stated before and I repeat, with all the revelations in the 2016 Auditor General’s report we have a “wasteful” public service system that spends more resources than the services it delivers.
Therefore we would like to urge government through the ministry of finance to expedite the process of amending the Public Finance Act in order to strengthen systems in government institutions.
Taxation is the most reliable way for an economy to raise money to finance public services. It is commendable that government through ZRA has over the years embarked on tax reforms aimed at easing tax payment and generating more tax revenue such as the Tax Online systems, appointments of tax agents, to mention but a few. However, more can be done.
The recent revelations in the Paradise Papers make references to public officials, private individuals and corporates investing in tax havens and offshore accounts. It is necessary that international transactions relating to tax havens are scrutinized for tax purposes.
A tax haven as you might be aware is a Jurisdiction whose legal regime is exploited by non-residents to avoid or evade taxes.
A tax haven usually has low or zero tax rates on accounts held or transactions by foreign persons or corporations, including the lack of effective exchange of tax information with other countries, lack of transparency in the tax system and no requirement to have substantial activities in the jurisdiction to qualify for tax residence.
Why then should Civil Society Organizations be worried about financial transactions relating to tax havens and offshore accounts; because the question of illegality and morality is put into effect.
The illegality aspect of shifting funds to tax havens stems from the fact that the profits accrued are not subject to audit and scrutiny by the Anti-corruption commission in the case of public officials and also ZRA, the Auditor General’s office and other state auditing agencies for tax malpractices in the case of private individuals and corporates.
The morality aspect stems from the fact that non-residents who shift these profits do have a moral compass that guides in declaring their profits so that they face a tax liability which mandates them by law to do so.
By being able to hide their profits and not subjecting them to their national tax authorities (country of origin from which the resources are obtained from) they strip their various countries of collecting revenue which can be used to foster public service delivery.
We urge government to investigate High Net-Worth Individuals (HNWI), corporate bodies and public officers operating offshore accounts and investing in tax havens. To this effect, those engaged in illegal financial dealings should be criminalized.
Government should take action to increase transparency in our tax system, starting with a public register of a beneficial ownership. This policy would reveal the true owners of anonymous companies and trusts, shining a light on the tax. In addition, government should close all the loopholes that allow for tax avoidance.
Lastly, it is being “FALSELY” reported in some sections of online media that we are calling for the arrest of certain individuals.
We wish to firmly state that ActionAid is a non-partisan organization. We are very objective in all our work, for those who have followed our tax work, they can attest to the fact that we have been very consistency calling for fair taxation of all.
Further, just to mention that in our earlier statement issued on the Paradise Papers we did not mention any individuals or call for their arrest.
Our position was clear- we called for an investigation by the Financial Intelligence Centre (FIC) on any illegal financial transactions relating to offshore accounts and tax havens by public officials, High Net Worth Individuals, Corporates and Politicians.
Our stance is that any illegal financial transaction should be criminalized as a lot of tax revenue is being lost by such.