Investigate tax haven links, govt urged
By BENNIE MUNDANDO GOVERNMENT must thoroughly investigate the motive behind those listed on the Paradise papers’ of exposé as their actions may not only border on tax avoidance but also pose a threat to national security owBy ing to the secrecy of such international business intercourses, Christian Democratic Party (CDP) president Dan Pule has observed.
Dr. Pule said while there was nothing illegal about registering a company in Mauritius or another tax haven, the built-in secrecy of tax havens had historically attracted money launderers, kleptocrats and politicians eager to hide bribes and that allowing politicians such space could spell doom for the country economically and politically.
“Let me call upon Government to investigate this story of offshore investment especially on Zambians, more so, those who were involved in the privatisation of our parastatal companies. It is very important that Government doesn’t just give a deaf ear to this situation. For tax avoidance, there is no time limitation for investigations and all institutions connected to fighting crime of this nature must take interest in this.
“This could not only lead to loss of revenue for Government, but could be used as an avenue for funding actives that can be a danger to the state. Let them not give a deaf ear to this situation. We want to know what Governmnet is doing over this information which has come. Those found culpable must be prosecuted. Mistakes and crimes committed need to be corrected. If there were crimes committed in the past, let Government take action now,” Dr. Pule said.
He said there was need for Government to pool its resources to help local investigative wings to engage with some internationals bodies to relook into the contents of the Paradise papers and fish out Zambians who may have committed criminal activities.
“Government has the means and ability to investigate through international organisations that can help to investigate this matter and bring the culprits to book. Zambians need to know the truth about these stories.
“I am concerned about it because these cases may border on conflict of interest as there could be parastatal companies which could have been privatised, ceased their operations here in Zambia to evade paying tax, but were opened in these tax havens,” he said. The Paradise papers identified UPND leader Hakainde Hichilema as one of the 120 politicians across the world that have used tax havens for tax avoidance purposes while chronicling how Zambia Sugar Plc avoided paying tax to the Zambian Government after Standard Bank of South Africa acquired a US$70 million loan, the company which is a subsidiary of Illovo Sugar Limited.
That loan became a subject of a tax-avoidance scandal after a report by ActionAid-Zambia exposed how Illovo used artificial structuring to dodge Zambian taxes. This meant the company paid an effective tax rate of 0.5 percent when Zambia has a corporate tax rate of 35 percent.