GOVERNMENT revenue amounting to K12 billion has been kept in an account at a private commercial bank in Lusaka since January, contrary to regulations that such should be immediately transferred to the central bank.

Times investigations reveal that this money is tax revenue collected by the Zambia Revenue Authority (ZRA).

The money has been lying idle for the last 11 months in the said account referred to as ESCROW account.

It has also been revealed that the K4 billion payment in a transaction President Michael Sata intervened and stopped midway, was to be made from the ESCROW account.

It is not yet established how many other transactions have taken place in the said account.

The President disclosed at a swearing-in ceremony in October this year that there was a “scam” in which ZRA was about to pay K4 billion to a “fake” clearing firm operating scanners at the northern border town of Nakonde in Northern Province.

Mr Sata immediately instructed the Zambia Police Service and the Ministry of Finance and National Planning to block the payment and investigate any other transactions that could have been made from State coffers to pay the firm.

The president noted that the scanners at the border post belonged to the Zambian people through the ZRA.

“This morning, ZRA was supposed to pay K4 billion to a front of somebody who was in my office but the scanners which are at Nakonde belong to the Government of the Republic of Zambia through ZRA,” Mr Sata said when he made the disclosure in November.

Documentation has also revealed that the same local commercial bank is holding US$1 million belonging to Mpundu Trust Limited, whose source is unknown.

The Times has learnt that the named local commercial bank received instructions from a Cabinet minister in the previous regime to open this account.

The Drug Enforcement Commission (DEC) has since opened investigations into the matter.

President Sata recently instructed law enforcement agencies to investigate how a private bank account belonging to Mpundu Trust Limited, got to hold a colossal sum of $1 million.

The president gave the directive in the wake of revelations that Mpundu Trust had unexplained funds in one of the commercial banks in the country.

On the basis of the colossal amounts involved, the president felt that it would only be fair and prudent for the DEC in liaison with other law enforcement agencies to professionally and systematically investigate the matter.

Recent media reports revealed that Mpundu Trust was linked to former president, Rupiah Banda.

[Times of Zambia]

SOME bakeries in Lusaka have increased their prices of bread despite President Sata’s appeal in October to bakers not to go ahead.

A Daily Mail survey around some parts of Lusaka revealed that some bakeries in Garden compound, Northmead and Kabwata area have increased by K200 to K500 respectively.

The some bakers who declined to be named attributed the increase to the high cost of doing business while others said they will also adjust their prices upwards next week.

In Kabwata a loaf of Family bread which used to cost K5,000 will now cost K5,900, Standard bread will cost K4,900 from K4,000 while bread rolls will sell at K5,500 from K5,000.

A notice at one bakery stated that the increase has been necessitated by increasing input cost.

“This serves to inform you that bread prices have been adjusted upwards with immediate effect. This has been necessitated by ever increasing input cost,” it read.

In Garden compound bakeries are expecting to increase by K200 and this has been received with shock.

Gideon Manda, a resident of Garden Compound said the cost of living in Zambia has become too expensive adding that some people cannot afford to buy bread at current prices.

“I am shocked that bread has become too expensive now, we as parents will not be able to provide a decent breakfast meal for our children because most of our children depend on bread, “he said.

Another resident Kelly Chileshe said they unjustifiably trying to hike prices in a bid to make a killing because of Christmas and New Year celebrations.

Agnes Nkoma, a Kabwata township resident, called on Government to intervene in the matter and ensure that prices of bread are stabilised in order to reduce the cost of leaving which she described as expensive.

“Some of us are not employed, we cannot afford to buy bread anymore and this is what we consume almost everyday. We will be very glad if government consider reducing the price, “she said.

Meanwhile Zambia Consumers Association executive secretary Muyunda Ililonga says consumables such as bread are expensive for the majority of Zambians adding that Government should ensure that the cost of living in the country is reduced if poverty levels are to reduce in the country.

Mr Ililonga said the reason being advanced by millers for the increase in the price of bread is not substantiated.

He said some millers have attributed the increase in the price of bread by K500 to the weakening Kwacha against the US dollar.

Government recently authorised the importation of 20,000 of wheat and 5,000 tonnes of wheat flour to supplement the current shortfall of 60,000 tonnes of wheat.

[Zambia Daily Mail]

MINISTER of Mines and Natural Resources Wilbur Simuusa has directed Zhongui Mining Group Limited to conduct an environmental impact assessment (EIA) and compensate the Zambia Forestry and Forests Industries Corporation (ZAFFICO) for invading its land before the Chinese mine starts operating.

The mining group is the owner of the US$690 million Ichimpe Copper and Cobalt mining project in Kalulushi.

And Mr Simuusa has challenged the Chamber of Mines of Zambia (CMZ) to state its position on the perception that mining companies are not honest in their voluntary tax declarations before Government can consider appointing independent international auditors to carry out compliance audits.

In an interview on Tuesday, Mr Simuusa said the matter is being resolved and that he has directed ZAFFICO and the Forestry department to evaluate the liabilities involved.

The MMD Government under former President Rupiah Banda allowed Zhongui Mining Group Limited to start the construction of the Ichimpe Copper and Cobalt Mine without conducting an EIA and on ZAFFICO land.

“I have insisted that the mine owners should conduct an EIA. We will not allow them to start operating without an EIA which is approved and without looking at issues of compensating ZAFFICO,” Mr Simuusa said.

Mr Simuusa hopes that the issue will soon be resolved because the Patriotic Front (PF) government is in a hurry to create jobs for Zambians.

The Ichimpe Copper and Cobalt Mine is expected to create 1,700 jobs at the construction stage and more than 2,000 once the mine is opened in 2014.

Ichimpe Copper and Cobalt Mine is expected to produce 35,000 tonnes of copper and 2,000 tonnes of cobalt per annum.

During the groundbreaking ceremony on May 18 this year, former President Banda said: “I have observed that this mine is being developed on a piece of land whose surface rights are held by ZAFFICO. I am advised that ZAFFICO had just planted its second generation of trees and therefore it is a productive plantation.”

And Mr Simuusa has challenged CMZ to state its position on the perception that mining companies are not honest in their voluntary tax declarations before Government can consider appointing independent international auditors to carry out compliance audits.

Reacting to calls by CMZ that Government appoints independent international auditors to carryout compliance audits, Mr Simuusa said it is unfortunate that some mining companies are claiming that their mining costs have increased by 20 percent after Government increased mineral royalty tax.

“Let us use this audit to ensure that all the statements mining companies are making are correct. We should be very clear as to the reason why we want the audit.

“From the look of things, it is like the Chamber of Mines is trying to defend mining companies. What are their findings as Chamber of Mines? Let them state their position on the perception that mining companies are not paying enough tax,” Mr Simuusa said.

[Zambia Daily Mail]

TRANSPARENCY International Zambia (TIZ) says revelations that the former Minister of Finance and National Planning Situmbeko Musokotwane gave Pepsi Cola Company a K10 billion tax holiday is an indication that leaders in the former administration had no fear of the law.

TIZ president Reuben Lifuka said former Government leaders broke the law with impunity as they believed they would be in power for a much longer period.

Mr Lifuka said this in Lusaka yesterday when he featured on ‘Let the People Talk’ programme on Radio Phoenix.

He said former Government leaders who abused their authority or misapplied funds should be prosecuted.
Mr Lifuka said there should be no sacred cows, and that those who broke the law should dance to the music.

He said no one should be immune to prosecution when enough evidence is presented.

“Those who flout financial regulations should be prosecuted. There should be no sacred cows,” he said.
Minister of Finance Alexander Chikwanda said he is not ready to comment on the matter now.

“I will only issue a comprehensive statement after referring the issue to the relevant organs of government such as the Attorney-General’s Chambers and Cabinet,” Mr Chikwanda said.

When contacted for a comment, a Pepsi Cola Zambia senior official, who did not want to be named, referred all queries to the company’s chief executive officer, a Mr Shankar.

“I have seen the article in your paper but the best person to comment on this matter is Mr Shankar who has been named,” he said.

Mr Shankar’s mobile phone was off the whole day yesterday.

Zambia Revenue Authority Commissioner-General Berlin Msiska said he is unable to comment on the Pepsi tax rebate.

“I am still settling down and I do not have enough information on the matter. It would be inappropriate for me to comment,” Mr Msiska said.

And Trade Kings Limited, a local manufacturing company says the tax holiday incentive is open to irregularities and abuse by certain companies, especially foreign.

Company corporate affairs manager, Bright Chunga said in an interview in Lusaka yesterday that some foreign firms have closed their companies after the expiry of the tax holiday incentive.

“I recall at some point, Government gave some furniture shops and others dealing in suits a tax holiday but most of them left after the expiry of the period. So this incentive can encourage irregularities,” he said.

Dr Chunga said since the establishment of Trade Kings in 1995, it has not received a tax holiday.
“Trade Kings has never ever been given a tax holiday since inception,” he said.

He said the investment licence is the only tax holiday which applies to every established company.
Dr Chunga said the Investment Act, stipulates the types of tax holidays that apply to various investments.

“I know of a tax holiday which applies when a company invests over U$500,000. However there is another type of holiday which is discretional. This is what the investment Act stipulates,” Dr Chunga said.

The Daily Mail has revealed that Dr Musokotwane authorised a K10.8 billion tax holiday to a company that produces Pepsi Cola in Zambia.