Business

‘Non-tax compliance costing country huge revenue’

NANCY MWAPE, Lusaka
ACTIONAID Zambia says it is unfortunate that the country is losing huge revenue through illicit financial flows that could fund public services as a result of non-tax compliance.
Over K3 billion was transacted on suspected bribery and corruption in 2016, according to the Financial Intelligence Centre Trend report 2016.

ActionAid interim country director Kijala Shako said at the stakeholders meeting analysing the trend report that the revelation by the publication that most foreign companies that wired funds to foreign jurisdictions were not tax complaint is disturbing.
“As ActionAid, we acknowledge the various initiatives that Government is undertaking through ZRA to enhance tax revenue collection as commendable,” she said.
According to the trend report, the intelligence centre froze funds amounting to K2.5 million for suspected bribery, theft and fraud.
The centre also notes the use of personal accounts for business purposes to evade tax has continued.
Last year, a total of 719 suspicious transactions and spontaneous disclosure reports were received by the centre for various entities mandated to submit reports.
At the same event, Bank of Zambia (BoZ) policy and research senior analyst Calvin Habasonda said illicit financial flows distorts the money demand function, damages the financial institutions and gives rise to market volatility.
“We are aware of the adverse effects of illicit financial flows or money laundering that gives rise to market volatility such as interest rates, inflation and exchange rates,” he said.
He said money launderers give rise in asset bubbles and inequitable distribution of resources in the economy.
Mr Habasonda said BoZ’s key mandate is to maintain financial system integrity, maintain stability and protect consumers.
He said banks are the first in defence line when it comes to fighting illicit financial flows.
Mr Habasonda commended commercial banks for their increased level of reporting suspicious transactions to the intelligence centre.

 




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