By Bennie Mundando
ZAMBIA has recorded a decline in cases of tax evasion due to increased implementation and enforcement of tax laws, the Financial Intelligence Centre (FIC) has revealed.
In its 2019 trends report, the FIC says the Zambia Revenue Authority (ZRA) collected a total of K27.7 million through taxes compared to K62 million collected in 2018.
The FIC also says an analysis of the Suspicious Transaction Reports (STRs) in 2019 indicates that some institutions are operating in Zambia without being registered for taxes.
“From 2018 to 2019, there was a decline in cases involving tax evasion. This may be attributed to increased implementation and enforcement of tax laws and regulations by ZRA. In 2019, ZRA assessed ZMW 27.7 million as a result of the disseminations made by the Centre compared to ZMW 62 million assessed in 2018.
“In other instances institutions are registered in the wrong tax category. For example institutions are registered for turnover tax when their turnover has already significantly exceeded the prescribed threshold,” reads the repot in part.
It says methods employed to evade tax include repatriation of proceeds from mining companies in Zambia to offshore jurisdictions while declaring losses in Zambia as well as the use of employee accounts by corporates, whose proceeds were channeled through employee accounts in order to reduce the revenue and therefore the tax liability.
Others include a situation where some corporates continued to employ false accounting techniques to reduce their tax obligations. This was done through group company loans and use of personal accounts for business purposes, as well as none declaration of exportation of resources such as Rosewood (Mukula) and under valuation of precious stones and base metals that are exported to foreign jurisdictions