Saturday, April 20, 2024

VAT in Zambia needs to be reformed, We can’t afford a tax that creates debt, Says Kingsley Chanda in his handover notes

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Good Morning Colleagues,

Today I am extremely delighted to hand over this important institution to Mr. Dingani Banda. I am delighted because I am handing over a robust and vibrant tax authority to someone I employed in the Authority in January 2004 as Assistant Commissioner Data Management and Intelligence to help ZRA successfully implement ASYCUDA. Mr. Banda is a brilliant ICT specialist whose contribution to ZRA in various portfolios has been exceptional.

Analogically, on Friday last week, President Hakainde Hichilema gave Mr. Banda keys for a fully refurbished bus with 2,309 people carrying good food for a party with 18 million people in another town. He instructed you Mr. Banda to drive that vehicle, deliver the food and have a good party with 18 million people waiting. Your bus has a steering wheel, a hooter, windscreen, rearview mirrors, and accelerator among other driving accessories.

Therefore, for you to reach your destination where 18 million people are waiting, you must use less of the rear-view mirror and the hooter. If you focus in the rear-view mirror you will crush, kill the passengers, destroy the bus and the party will not take place. If you over use the hooter, the noise will irritate both passengers and other motorists on the road.

The bus is ZRA, the passengers are your staff, the food is the revenue, the 18 million people are Zambians waiting for Government to provide services of public good. Your rear-view mirror depicts your past frustrations and differences with your team members at ZRA. To avoid crushing, focus on your steering wheel front windscreen, your accelerator, and your breaks. Yes, check the rear-view mirror and use the hooter when it is absolutely necessary. Your hooter – Learn when to speak and when to keep quiet. Never respond to socio media. But focus on what the President has tasked you to do – generate revenue for the 18 million Zambians.

Show leadership and never make emotional decisions when dealing with your staff and taxpayers. Always remember that not everyone will like you. But that doesn’t matter. You are not in a popularity contest. In fact, if you become popular among smugglers and tax evaders Zambians must be worried. I know when my contract was terminated on Friday, there were celebrations in Nakonde, Chirundu, and Kazungula among smugglers. That was good feedback for me but show them that you won’t tolerate smuggling in any form.

As a leader you MUST like everyone due to the value they are bringing to the organization. Trust me, I have proved this in my 5 years at ZRA; there is a lot of value in unity despite our diversity as ZRA employees. Foster genuine unity and teamwork. If you start picking up battles with your staff and taxpayers, you won’t succeed in delivering revenues. Please use the immense power and authority in the office of the Commissioner-General to build ZRA and not to destroy it.

In the event that you find a mistake that I made during the course of my work based on the facts I had at the time, please just correct it. Don’t use it as an excuse for your failure and sing about it. There is a limit to which you can blame me for your failure beyond which people will start questioning you. I have left you with all the tools you need to change anything but please don’t change what is working because you will destabilize the institution and revenues will respond negatively.

As I said earlier, I am leaving you with a robust and vibrant ZRA. I am also leaving at a time when the Authority has fully delivered the 2021 revenue targets four months before the end of the year. This was not by accident; it was out of meticulous planning and execution of our performance strategies during the COVID 19 crisis. Your “landing” Commissioner General therefore is very safe and very comfortable.

Unfortunately, during your tour of duty at ZRA, you only have two options:

  1. Keep ZRA Robust and Vibrant or;
  2. Make ZRA more robust and more vibrant. (Full Stop)

Anything lower will not be acceptable to this Nation that desperately need revenues. Failure is not an optional and it was never our option since 2016.

I am leaving you with two major challenges:

  1. Value Added Tax – We grew VAT by 300% in 2017. Even the IMF team was shocked. This followed the introduction of Withholding VAT and collection at source. But by that time we had over K8 billion in refund arrears. So I made proposals to the government to stop the bleeding and refund arrears. I was almost killed. Both my staff and the business community called for my blood. VAT in Zambia needs to be reformed. We can’t afford a tax that creates debt. It’s as simple as that. If we want VAT, the government MUST allow ZRA to refund all due refunds in full. The gross VAT collections are enough to deal with new claims and not arrears. From K8 billion when I called for reforms, the debt now is K36 billion and completely unacceptable.
  2. ZRA funding model. This must be modernized and assured. You don’t need to continue writing letters and reminding the ministry to fund ZRA. This is not a sunk cost. It’s a lucrative business investment that must be over-prioritized because the dividends are obvious and immediate.

Be assured I will not leave you without the means to achieve this quest for excellence. For this reason, I will leave you with four “instruments of power” which in management we call Strategic Focus Areas:

  1. Staff/People – look after your staff very well. Don’t victimize them, counsel them, motivate them and ensure that you further improve their conditions of service. Of course, those that are truant and fraudulent help them out following the due disciplinary process. Over my tenure, I have improved ZRA conditions of service tremendously but please better them as much as you can; when you do this the staff will, in turn, support you and help you deliver
  2. Systems – please continue with the digital agenda. Invest more in technology and simplify compliance requirements. Enhance our Innovation Centre and our strategic partnership with the Copperbelt University; here I have no doubt because this is your passion.
  3. Taxpayers/stakeholders – harness them, support them, respond positively to expectations of your parent ministry, donors, etc. Taxpayers are the reason ZRA exists. Expand our customer service centers and enhance taxpayer education.
  4. Results /Revenues – don’t waste time on who likes you; who hates you, who said what when you were out of ZRA. That will drain you and result in negative energy. Forgive and forget – focus on the bottom line. That is what the President will appreciate as a thank you for selecting you out of hundreds of capable Zambians. I can assure you that consistent good revenue performance will keep you in the job.

 

If you use these tools religiously, you will make ZRA more robust and more vibrant. I will be available for consultation if necessary, anytime.

Before I end, let me appeal to all ZRA officers and taxpayers to support Mr. Banda as he takes upon this enormous responsibility.

I have set the stage the choice is yours. I genuinely wish you success and God’s guidance.

Thank you.

Dr. Kingsley Kangwa Chanda

Monday, October 11, 2021

32 COMMENTS

  1. Thats how a mature man leaves the stage…. positions are not for life. We need change as change is good for new ideas and thoughts. Go well and take the next opportunity

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  2. Nice peace of advice especially with regard settling arrears. It makes no sense boosting of revenue collections from the same companies you owe money. These companies are not given WHTVAT certificates to offset the VAT Return payments but instead, the certificates keep accumulating resulting into government debt. The companies’ working capital is affected because the cashflows are tied in government debt. Consequently, ZRA work done is equal to zero.

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  3. From Tarino Orange’s self revealed tribalism, I now understand what Mr Kambwili has all along, been warning the people of Zambia about. It is frightening to realise there are people like this in our peaceful Zambia. Very sad indeed!

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  4. @Tarino Orange please when it comes to nation affairs that includes the all country please don’t mention tribes

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  5. Anyone reading this knows this man’s termination of contract was premature. He had a lot to give to the country.
    Why HH feels the need to fire EVERYONE is beyond me.

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  6. Too late for the party mate! You left your head on the guillotine in the leaked phone recording. You were convinced UPND will never win an election. You were dead wrong. Next time listen to your own advice, work and talk less especially in Ichibemba.

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  7. In a mature government, the outgoing commissioner would go on and work behind the scenes as government think tank or consultant. These are the people our government should be consulting when coming up with new tax incentives or ideas. Not ministers that wake up one morning ati we need breathing tax for government to collect for keeping you alive. We wish him well and hopefully he can go on to do bigger and better things. Maybe ku ZESCO where serious modernisations is required.

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  8. I have nothing against the manner you have set about handing over office… but I would have preferred you did that privately… to advertise your ‘handover’ note to your colleague ‘whom you employed as an ITC Ass. Com ‘ speaks volumes… please close that freight coy.. farewell…

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  9. The UPND hateful praise singers cried for your blood. Bally granted their wish. Now they have started crying for UNZA trained electrical engineer Victor Mundende’s blood. We know it is a matter of time before Bally grants their wish.

  10. Pure Nonsense Mr K Chanda.
    When ZRA collects input VAT at customs , that money is supposed to be held in treasury for 30 days until a return is submitted the VAT payer.
    In Zambia , you chew the VAT collected as soon as it is collected . When the VAT claim is made by a company or individual , ZRA has no money available and incurs a debt. This debt continues to grow.
    SIMPLE, DON’T SPEND MONEY THAT YOU DON’T HAVE.
    VAT is not a problem. Its the tax administration that is a huge problem.

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  11. The lacklustre govt of hh is making criminals pose like they ar good citizens. This wil certainly backfire on hh for hes so blind. For example Chanda as ceo of zra runs a clearing co called ciltax which hs contracts with big cos bcoz of his position at zra. Hh shd resign. He removed chanda out of pressure and not his own will. Hh such a big disapoitment..is it bcoz of lungus witchcraft thats blinded him or what.

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  12. Why did the guy get sacked? Because he is a complete failure. Does one normally take advice of a complete failure? No. Forget his useless notes!

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  13. VAT in Zambia does not need to be reformed. VAT is not a problem and just a system that should managed by people. Stop waffling ,you and PF thieves were a problem. You created a debt because you were stealing the money for the refunds.

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  14. Bloggers my account has been cloned by someone craving for attention using it to troll…I wont mention it as that what it wants.. attention which it has not been getting lately so again it has resorted to slandering me. It will go to the extent of even responding to it comments using different alias.

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  15. Let me also add that yes I am Tonga and proud. I will celebrate that a Tonga is president but I won’t rub it in anyone’s face like the pf used to with Eastern tribes. As a Tonga man I should be able celebrate victory of a tonga leader without fear or being cloned.

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  16. Ichi Chipuba is still receiving media coverage- why? Everyone else got fired & left quietly , why is this failure announcing & given press briefs? To say farewell? To who? Cos nobody is interested to even see yo last foot as u leave. Nobody

  17. Ba tata mwasesela ilyokawa. You should have followed that advise yourself in the five years you headed this institution.

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  18. High Taxes Kill Economic development. Zambian Government need to re look at VAT and other taxes because they just make the economic development to stall. See Arab Countries, they do well, because they don’t have taxes. Revenue should not be thru taxes alone. We can do better.

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  19. Excellent BUT! “I have done this, I have done that.” worries me. There is some element of pride in this man. I would have clapped if he used the…”We have done this together; we achieved this together.” These are basics parents taught us.

    There is also that in him saying….”I employed you at ZRA and I know your weaknesses.” He has not addressed his coming in colleague with much respect.

    But cogratulations Mr. Chanda you go well with a good record under your name.

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  20. Just go in peace you mistreated this young man and now want to protect the PF connected cardes you employed. Let them reapply and if they are qualified they get the job.
    We have to look in rear mirror to know our enemies.

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  21. Very strange indeed. Never heard it anywhere, a departing CEO lecturing his successor. If they needed that I guess they would have kept you.

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  22. He is belittling his successor that he is the one who employed him. Was it him who employed him or it was ZRA? The employer is ZRA and not an individual.

    He says he employed him as an ICT officer, meaning he feels the man is not qualified to be CEO ZRA. He feels he should just be ICT officer.

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  23. @22 You are just a fool at times. We are one Zambia one nation and we are slowly getting past the tribal nonsense yet you keep saying you are Tonga on every fora. Do you see why most tribes have always said bad things about certain tribes in this country, they tend to become a danger. We are inter-married now and this tribe this tribe that is nonsense. Imagine what would happen should another President from another tribe win in 2026, back to labeling others tribal, and we should avoid this. WE LOVE MOTHER ZAMBIA THAN BORE THE 73 TRIBES OF ZAMBIA.

  24. And this is the Kingsley Chanda that most Southern African countries are seeking to engage for his many years of experience yet tribal maniacs are celebrating over our country’s loss of such an asset. Look beyond Political patronage. Countries like Malawi, Drc, Namibia all want to tap into his experience and whether you like it or not, ZRA has transformed during his time. Dingani will have a good starting point. Welcome Dingani , just help contribute to the transforming of the ZRA into higher heights.

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