• Law Enforcement Agencies to investigate findings of the Financial Intelligence Centre (FIC).
• Report revealed tax evasion and avoidance among multinational companies,
• Proceeds of crime from tax evasion rose from K195 million in 2018 to K450 million in 2019.

Zambia Tax Platform (ZTP) has urged Law Enforcement Agencies in the country to act on and investigate the findings of the Financial Intelligence Centre (FIC) in relation to financial crimes perpetrated over the 2019 period.
Organization Coordinator Ibrahim Kamara said FIC published the Trends Report of 2020 which covers the 2019 financial year.
Mr Kamara noted that the Report revealed that tax evasion and avoidance among multinational companies, particularly those in extractive industries robs Zambia of much needed resources for development as profits are largely externalized.
He noted that the proceeds of crime from tax evasion rose from K195 million in 2018 to K450 million in 2019 with mining multi-nationals accounting for a significant portion.
“In May, 2020 the Supreme Court of Zambia ordered Mopani Copper Mining Plc (Mopani) to pay the Zambia Revenue Authority (ZRA) an additional tax of K240 million,” he said.
“This case is a landmark victory for the Zambia Revenue Authority and the country at large in that it showcased evidence of tax avoidance through base erosion and profit shifting.”
He said the dispute between the ZRA and Mopani arose over pricing of copper that the mining corporation sold to its parent company Glencore International AG based in Switzerland and was one of the largest transfer pricing cases that the ZRA has dealt with.
“Corruption also remains a perennial issue with those charged with authority being the main culprits. Public procurement was found to be the primary source of syphoning public funds,” Mr Kamara noted.
He explained that this is concerning for a number of reasons, firstly, it impacts negatively on allocation and distribution of domestic resources and secondly raises questions of accountability in the management of public funds and assets, particularly at a time when the country is facing its largest debt deficit in recent times.
“The perception of corruption further creates a negative image and jeopardizes inflow of funding from cooperating partners, adding that the Trends Report also showed a significant increase in the value of suspicious cash withdraws from K3 million to K25 million and deposits from K103 million to K534 million from 2018 to 2019,” he said.
Mr Kamara said this is alarming in that the attribution was to sectors such as agriculture, construction, and general trading of which large cash deposits were made by individuals mainly politically exposed persons depositing business proceeds into personal accounts to avoid and evade tax.
“It was also noted that of the 101 suspicious transition reports that were analyzed, only 44 were disseminated and this was attributed to the financial constraints and inadequate human resources,” he said.
He has since called for a stronger political will in the fight against financial crimes especially as highlighted in the FIC trends report.
Mr Kamara notes that failure by authorities to act on the findings from the recent FIC report will result in the report becoming a mere academic exercise adding that measures need to be put in place to deal with illicit financial flows and to hold multinational enterprises financially accountable.
“There is need for Law Enforcement Agencies to deal decisively with the suspected individuals perpetrating these crimes especially at a time when the country is in dire need of resources to finance its developmental programs, mitigate a debt crisis and fight the COVID-19 Pandemic,” he noted.