Parliamentary Public Accounts Committee Chairperson and Ndola’s Bwana Mkubwa Member of Parliament Warren Chisha Mwambazi has said Zambia like many other African countries has been losing colossal sums of money through illicit financial flows.
Speaking during the Second Sub-Committee on Tax and Illicit Financial Flows (IFFs) of the Specialized Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration in Addis Ababa, Ethiopia, Mr. Mwambazi said Zambia was also losing money from Tax avoidance and through capital flight.
Mr. Mwambazi said the challenge of tax avoidance in many African states resulted from weak tax administration systems that needed improvement.
He said Zambia had, however, put mechanisms in place to curb the vice by enacting appropriate legislation to address the problem of illicit financial flows, tax avoidance, and capital flight.
Mr. Mwambazi said the Government had streamlined the tax system and created a stable and predictable tax environment.
He said legislation such as the Anti-Corruption Act No. 3 of 2012 and the Prohibition and Prevention of Money Laundering Act No. 14 of 2001 contributed to curbing money laundering, which is a conduit for tax evasion.
The Member of Parliament also said the establishment of the Financial Crimes Court was testimony of the commitment by the Zambian Government to curb illicit financial flows.
“As Parliament we have enacted laws which also among other pieces of legislation is the Anti Corruption Act No 3 of 2012 which provides inter alien the prevention, detection, investigation, prosecutions and punishment. Apart from that we have also come up with financial crimes court which is a fast track court to ensure that it looks at some of these financial crimes in a quickest possible time so that we do not delay the judicial process. We have also come up with prohibition and prevention of money laundering Act,” Mr. Mwambazi said.
And African Union Commissioner for Trade and Industry, Amb. Albert Muchanga said Africa loses two hundred billion dollars (US$200 billion) annually on tax incentives and nearly ninety billion dollars (US$90 billion) annually through illicit financial flows.
He, however, expressed happiness that over 3.8 billion dollars had been claimed back for twenty-seven African Union Member States.
He called on African Governments to increase transparency and accountability in tax systems and adapt their tax bases to economies where rising goods and services could be bought and consumed virtually, without companies having to be physically present in a country to be part of the local market.
According to First Secretary-Press/Tourism at the Zambian Embassy in Addis Ababa, Ethiopia, Inutu Mupango Mwanza, this meeting was held under the theme: “Tax in Africa: Contemporary Issues Affecting the Continent.”