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ZRA’s C-Ash scorched-earth policy: Who ultimately loses?

ABOVE is an abridged verbatim attributed to Zambia Revenue Authority (ZRA) corporate communications manager Topsy Sikalinda, in the Sunday

Mail edition of May 28, 2017, at an event the previous day to burn 66 boxes of smuggled cigarettes worth K660,000. This action, reportedly, was according to provisions of the Customs and Excise Act.
Now, this action birthed a cluster of ideas that ceaselessly jostled for my valued attention to either applaud or take a dim view of ZRA.
Smuggling is an act destructive and inimical to fair trade practices and desirable economic prospects, and for Zambia, it has remained an endemic phenomenon surviving even the severest of prohibitive laws launched against it since the UNIP regime. Today, smuggling, by its own illegal rights to exist, loudly proclaims the many punchy ways in which it keeps evolving as one parallel, major informal employer.
Truth: Zambia’s laws to curb smuggling have not been inadequate; the country has done everything in the legal lexis, but it takes two to tango.
While ZRA goes about its statutory task of collecting all forms of tax and duty, one niggly, inescapable fact is that agents of sabotage are lushly thriving within the system and reaping in league with smugglers in a smooth, subtle game of aiding and abetting – a species of corruption quite intractable.
When such a conundrum becomes blessed with very porous borders, the few clean Customs officers who mean well – funny peculiar – are seen as the very weeds needing uprooting. No wonder smuggling happens as normally as a major second-nature industry because it is a de facto form of employment for unemployed thousands; it is simply innate. Therefore, Zambia failing to nip it in the bud is hardly any strange as the scourge is a constituent element embedded in the Zambian culture of buying and selling, and it tugs at the very umbilical cord of economic survival of career cross-border traders.
Co-existing with this insoluble problem of smuggling by meeting it half-way using CONTAINMENT is the only best available option given the eternity Zambia has fought fruitless battles with it. The country has neither the financial resources nor human capital to hedge her eight-neighbour-long land-locked border-line in American style. Neither has she First World capacity to DIGITALise, SENSORise and LASERise all her key border areas and other crossing points in a high-tech, sophisticated anti-smuggling fashion. Such a technological feat is just too futuristic for Zambia to contemplate and so shall remain a very dim and distant prospect. Thus, in the fixity of the status quo, the war against smuggling shall remain a permanently pendulous monotone not dissimilar to the pattern of gains and losses in the HIV-AIDS decades’ war.
Harrowing accounts are told of how tough-surviving smuggler-traders endanger their lives swimming side by side with crocodiles, hippos and water-snakes in the super-cold Zambezi waters at pre-dawn hours ferrying contraband ashore, all in the nerve to outmanoeuvre Customs authorities – the only option when all canoes would be fully booked, meaning waiting for one to make a round back to the river-bank entails much time lost for cash. Other borders and backwoods, too, witness their own peculiar smuggling styles.
Containment entails that while ZRA professes its aversion to smuggling and conducts legal surveillance against it, the Authority must set a threshold in its discretion to strike a Win-Win compromise while accepting that the problem is permanent. This is because Government is racing to not only expand its tax-base but also maximise collection from all taxable sources, including smuggled goods, which ZRA as per mandate impounds and publicly auctions to realise revenue for the treasury.
In times like these, when ZRA is sparing absolutely no calorie in snuffing revenue from every nook and cranny, igniting K660,000 in cigarettes is far from the ideal thing to do. It only amounts to a Lose-Lose scenario where not only the culprits are put out of cash, but Government, too, happens to be the ultimate loser. Those cigarettes were a patented product manufactured at great cost elsewhere, and Zambia abounds in potential clients who would have redeemed considerable Kwacha for the treasury had they been auctioned, because, DEDUCTIVELY, it has always been ZRA’s trend to auction all impounded, yet worthy goods.
Only recently, ZRA issued concessionary notices, Tax Amnesty, with grace period elasticated up to December 31, for the public to redeem their contraband, including vehicles, to the effect some Government departments were gifted vehicles among those unclaimed. Now, that is what I call Lose-Win because while the delinquent importers lost out, Government benefitted.
Arithmetic Argument: If the tax amnesty can yield K105 million from mostly informal businesses in too short a time it has run, how much more will it churn at year-end? How many ‘K660, 000s’ could ZRA torch by year-end with continued cigarette smuggling? Because: put smugglers’ cash to ashes today, tomorrow, like the phoenix, they bounce back; as Nigerians in their parlance would ask, “Eh, how manage?”
Other than the only undercurrent of global battles with anti-tobacco legislations making cigarettes increasingly unpopular, nothing else could suffice as reason for easily flaming ‘K660,000’ as if it were EITHER a thousand head of pigs plagued by Swine Fever OR anything perishable that had expired. Stories are ever told of how some Customs officers, especially ones in border towns, comfortably stock their homes all year round with cartons of goodies like edible oils, ciders, detergents and other tasty imports, yet none of these have ended up in a bonfire even when confiscated.
Yes, people smoke, but who would want to stockpile a whole caboodle of cigarettes in their homes? Just to smoke on a year’s marathon? But talk of gulping at Hunter’s Gold, Savanna Cider, Windhoek Lager, Amarula 24/7/365, why not? After all, they keep talking of NO SMOKING, ANTI-SMOKING laws all they want, but no-one ever promulgates Anti-Alcohol Acts except, of course, in Sharia countries.
INDUCTIVELY, therefore, if spin-offs from the K660,000 worth cigarettes must escape the treasury, then people reasonably expect that all prospectively impounded goods, goodies, and motor vehicles must also be incinerated. Now, that is Customs fair play, isn’t it?
Mr Kingsley Chanda, the Commissioner General of ZRA, is a man whose passion cannot be faulted in the crusade to ensure Government incurs no short change from all its duty and tax entitlements, smuggling included, and I vouch for him, but whether or not he was well-apprised of the operation to gut that mammoth smoke-wealth remains entirely an internal ZRA issue.
The author is Zambia Daily Mail staffer.