Ex-ZRA boss Wisdom Nhekairo faces arrest over cargo scanners
By Mwala Kalaluka
Sat 14 Jan. 2012, 14:30 CAT
IMMEDIATE past Zambia Revenue Authority commissioner general, Wisdom Nhekairo and board secretary Nana Mudenda are facing arrest over the controversial procurement of cargo scanners from China.
Highly placed sources within the combined team of Zambia Police, Anti-Corruption Commission and Drug Enforcement Commission investigators probing the plunder of national resources, disclosed yesterday that Nhekairo was questioned and subsequently warned and cautioned over the cargo scanners last Monday.
Berlyn Msiska replaced Nhekairo when the PF took over the reins of government power last year.
On Monday whilst former education minister Dora Siliya was being interrogated over the awarding of a tender for the installation of radars at two international airports, Nhekairo was also seen entering the former Task Force on Corruption offices in Lusaka's Woodlands area with stacks of files.
"On that very day when Nhekairo appeared, he was warned and cautioned over those scanners," the source said.
"The docket is just being prepared and he will be arrested by next week."
The sources said Mudenda had also been summoned to appear before the plunder probe team in Lusaka yesterday in connection to the boarder scanners deal.
"Today we are supposed to warn and caution the ZRA board secretary, Nana Mudenda," the sources said.
"The issue is that these scanners were bought from a company called Nuctech in China and this company provided for maintenance and operation costs. There was a warranty involved."
The sources said it was therefore not necessary for ZRA to engage another company called Bradwell International to operationalise the boarder scanners.
"There was obviously pressure from State House," the source said. "To date these scanners have not been installed."
A commission of inquiry constituted by President Michael Sata to look into the ZRA's procurement of the cargo scanners heard on November 10, 2011 that former president Rupiah Banda allegedly arranged for an additional US$ 25m for the procurement of four more scanners.
Acting director for investments and debt at the ministry of finance, Michael Mwanga, had said the idea to procure machine equipment at border posts was initiated by late president Levy Mwanawasa who entered into a US$100 million government loan with China.
Mwanga said Mwanawasa had allocated US$25 million towards the procurement of the four scanners but his successor, Banda allegedly re-arranged another US$25 million in addition to procure four more scanners.
He said due to single sourcing of the company that procured the scanners, the government was forced to lose over US$4 million.
"Probably that is the price the government will continue paying if it continues to single source contracts. If this contract was open, each scanner was going to cost US$2 million from France and not US$6 million each as they were purchased from China," Mwanga said then.
A senior ZRA official told the Commission during a sitting at Chirundu Border Post that it was irresponsible for the MMD government to contract Bradwell International to operate the cargo scanner at Chirundu border when ZRA had the capacity to carry out the work.
ZRA Chirundu border assistant commissioner Arnold Nkoma said it was unwise for the MMD government to contract Bradwell International, a private firm, to run operations that bordered on the country's security.
The MMD government before leaving power engaged Bradwell International of UK to operate border x-ray cargo scanners for 10 years despite having some ZRA staff undergoing specialised training to handle such operations.
Bradwell International of UK, through its local subsidiary, Border Protection Company Zambia Limited (BPCZ), was engaged through direct bidding (formerly single sourcing) to operate the border scanner at Chirundu.
Under the contract, Bradwell was supposed to get 85 per cent of the revenue collected at the border while the remaining 15 per cent went to the government.
Former vice-president George Kunda hastily signed Statutory Instrument number 101 of 2011 on August 28, 2011 as an amendment to the customs and excise Act to pave way for the introduction of an examination fee, which is not a tax but a charge towards the management of the scanners.
Labels: CORRUPTION, WISDOM NHEKAIRA, ZRA
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COMMENT - The ZRA is collecting $3.4 billion in taxes? (K17 trillion : K5000/USD) Time to start an investment fund.
ZRA to exceed annual tax collection target
By Ndinawe Simpelwe
Fri 02 Sep. 2011, 13:40 CAT
ZAMBIA Revenue Authority commissioner general Wisdom Nhekairo says tax collections this year will exceed the annual target of K16 trillion. In an interview, Nhekairo said ZRA would exceed this year's target by K1 trillion because of the tax arrears that the mines have paid, adding that tax collection was on course.
"We will exceed that target by about K1 trillion and the excess of the K1 trillion we are going to make will actually be because of the mining tax arrears that we collected this year.
But otherwise the K16 trillion is on course, maybe in the last half of this year, we might even get a little bit more and go above the K16 trillion," Nhekairo said.
He said the mining tax arrears were all paid by June 30th this year.
"Everybody has paid the arrears as of 30th June, that's the K1 trillion I am talking about. That's the arrears of all of them put together and that's what we collected as mining tax arrears," he said.
Nhekairo also said taxes were contributing about 17 per cent to the country's gross domestic product.
He said ZRA's aim was to ensure that tax contributes about 20 per cent to GDP by 2013 after expanding the tax base.
"The tax base will not always be 100 per cent; there will always be businesses and individuals who are outside and not within the tax base that we can't currently capture. There is more we can do and our strategies are there to ensure that we increase the number of businesses and economic activities in the tax net," Nhekairo said.
"Obviously we could collect more if certain sectors do not have issues of failing to pay their taxes. But this is the normal thing that is going on, right now from our best estimates this is the tax that is collectable.
The possibility of collecting more is always there. No one collects the correct amount at any time because there will be failures of companies, there will be failures of people failing to pay."
Labels: TAXATION, WISDOM NHEKAIRA, ZRA
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ZRA losing 10% income through tax evasion
By Ndinawe Simpelwe
Fri 25 Mar. 2011, 03:59 CAT
ZAMBIA Revenue Authority (ZRA) Commissioner General Wisdom Nhekairo says the authority is losing about 10 per cent of its targeted revenues through tax evasion and smuggling.
In an interview, Nhekairo said the biggest challenge was to verify if big corporations were paying the correct amounts of tax.
“It is a challenge to verify the returns of big taxpayers. They have to be verified through audits but it is not easy. Other than that, we are faced with other challenges such as smuggling, corruption, low staffing and inadequate equipment. There are also low levels of tax compliance among stakeholders,” Nhekairo said.
He said there was need to put systems in place that would ensure that tax was not evaded in any way.
“We are partnering with other stakeholders to educate people on the importance of paying tax. Everyone has to know the consequences of evading tax because it affects all of us. We hope that after carrying out education campaigns, tax evasion would be reduced because it is almost impossible to stop it,” he said.
Nhekairo said the market was becoming more specialised and the authority would not rally behind.
He said there was need to upgrade ZRA's systems to keep up with and understand the market.
And Nhekairo has said ZRA was optimistic to meet its K16 trillion annual target in tax collections.
“We need to bring in all the people to pay tax. We hope to capture everyone especially the small and medium taxpayers,” said Nhekairo.
Labels: TAX EVASION, WISDOM NHEKAIRA, ZRA
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ZRA ties high PAYE to easy collection
By Florence Bupe
Fri 12 Nov. 2010, 04:00 CAT
THE Federation of Free Trade Unions in Zambia has rebuked the government for suggesting that income tax charged on individuals will continue to be high because it is
easier to collect.
Zambia Revenue Authority (ZRA) Commissioner General Wisdom Nhekaira on Tuesday informed the parliamentary committee on estimates that pay as you earn (PAYE) would remain high because it was easier to collect it at the source than corporate tax.
FFTUZ president Joyce Nonde-Simukoko charged that the government was being lazy by failing to broaden the tax base to relieve the narrow formal sector from paying high taxes charged on their income.
“What has been happening over the years is a sign of leadership failure. Government has failed to come up with ideas to capture income from the informal sector, and they do not realise that they are losing a lot of money in the process,” Nonde-Simukoko said.
“The fact is that the formal sector has continued to shrink and so the few people employed in this sector are over-burdened.”
Nonde-Simukoko said the problem of high PAYE was further aggravated by unattractive salaries in most formal employment sectors, especially the civil service. She expressed disappointment that the government had not bothered to explain to the public sector the challenges they faced in mobilising the informal sector.
Nonde-Simukoko also reiterated the urgent need for the government to revisit the issue of the windfall tax as a means of enhancing the country’s treasury.
“We have differed with government on the subject of the windfall tax and we are still aggrieved that our views have not been taken into consideration. We are not suggesting that taxes on the mining houses should be punitive, but government has to find a way of taxing the mines in a way that will benefit both the country and the investors,” said Nonde-Simukoko.
Labels: JOYCE NONDE-SIMUKOKO, PAYE, WINDFALL TAX, WISDOM NHEKAIRA, ZRA
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