Zambia Revenue Authority

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Zambia Revenue Authority
ZERO TOLERANCE ON CORRUPTION 27th CATA Technical
Conference-2006 Mauritius By Wisdom Nhekairo
Commissioner Direct Taxes Zambia Revenue
Authority.
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Introduction

• Corruption has become an issue of major political
  and economic significance in recent years and the
  necessity to take measures against it has become
  evident. It takes different forms but in tax
  administration it manifestly leads to tax evasion
  amongst other vices, resulting in reduced revenue
  collections.

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What is corruption?

• According to the Concise Oxford Dictionary, 9th
  Edition, corruption is defined as moral decay
  influenced by bribery or fraudulent activity.
• The Transparency International Corruption index
  defines corruption as the abuse of public office
  for private gain, and measures the degree to
  which corruption is perceived to exist among a
  country's public officials and politicians.

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What is the Impact of Corruption?

• The World Bank has identified corruption as
  among the greatest obstacles to economic and
  social development.  It undermines development by
  distorting the rule of law and weakening the
  institutional foundation on which economic growth
  depends.
• Corruption leads to a high cost of development.

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Impact of Corruption Contd.

• Reduced revenue collection resulting from -
• Low compliance as a result of loss of confidence
  in revenue agency
• Low motivation by members of staff
• Breeds unfair competition amongst business
  entities negatively affecting the consumers.

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Effort To Deal With Scourge at International Level

• International Conventions developed to combat
  corruption such as the United Nations Convention
  against Corruption (UNAC) and the OECD Convention
  on Combating Bribery of Foreign Public Officials
  in International Business Transactions are of
  key importance in the fight on zero tolerance
  against corruption.
• These texts, agreed by governments, recognise
  corruption as a worldwide and cross-border
  affliction, and express a shared high-level
  political commitment to addressing this critical
  problem individually and collectively.

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Effort To Deal With Scourge at the International
Level

• Each text establishes an international, regional
  or sub-regional framework of rules and standards,
  some of them binding, that promote domestic
  action and facilitate international cooperation.
• The World Bank has since 1996, supported more
  than 600 anticorruption programs and governance
  initiatives developed by its member countries.
• As corruption sabotages policies and programs
  that aim to reduce poverty, attacking corruption
  is critical to the achievement of the Bank's
  overarching mission of poverty reduction.

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Efforts to Deal with the Scourge at National Level

• Executive support towards this fight has been
  positive as the President of Zambia stated in his
  opening speech to the National Assembly when he
  declared the intention of government to combat
  corruption.
• In the spirit of good governance, the new deal
  administration has continued to pursue the policy
  of zero tolerance to corruption with a view to
  getting rid of corrupt practices in society.

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Effort To Deal With Scourge at National Level
(contd.)

• Legislation enacted and national corruption
  prevention policy and strategy developed to
  combat corruption.
• Creation of institutions to prevent and fight
  corruption such as the Task Force on Corruption,
  Anti-Corruption Commission and the Anti- Money
  Laundering Unit.
• Technical support has been sourced in
  conjunction with donor support to strengthen
  institutional capacity to deal with corruption.
• Increased public awareness programmes on the
  fight against corruption undertaken.

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Effort To Deal With Scourge at Institutional Level

• The Zambia Revenue Authority (ZRA) has put in
  place an Internal Affairs Unit, whose object is
  to investigate all matters pertaining to
  corruption involving employees.
• All employees are mandated to declare assets and
  interests on an annual basis so as to maintain
  integrity within the organisation.
• Further a taxpayers charter is in place to which
  all officers of the ZRA are obliged to abide.

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Challenges of dealing with Corruption

• Culture of corruption in a given society
• Weak internal controls and enforcement capability
  within public institutions.
• Inadequate funding of a revenue agency leads to
  vulnerability of the organisation and its
  officers.
• Poverty Levels within the general populace
• Bureaucratic procedures in public institutions
• Other Social factors

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Culture of Corruption

• Indifference to corruption
• Offering and soliciting of bribes
• Tolerance of corrupt practices

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Weak Controls

• Weak or non-existence of controls tend to
  perpetuate corrupt practices amongst officers.
• Lack of enforcement capability of agencies that
  are empowered to deal with corrupt practices.

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Inadequate Funding

• Leads to poorly remunerated staff who are prone
  to corruption (an antidote to the very reason of
  creating independent revenue agencies).
• Reduced resources to monitor and enforce
  integrity

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High Poverty Levels

• High poverty levels in a given society also leads
  to the perpetration of corrupt practices as the
  taxpaying community are financially challenged to
  meet their obligations and as such will tend to
  seek means that will reduce their financial
  obligations using corrupt practices.

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Bureaucratic Procedures

• The existence of bureaucratic processes tend to
  create an environment conducive for corruption as
  taxpayers will attempt to circumvent such
  procedures by offering bribes to revenue
  officers.

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SOCIAL FACTORS

• Low literacy levels in a society
• Inadequate provision of social facilities
• Poor service delivery to the citizenry

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MEASURES TO MINIMISE INCIDENCE OF CORRUPTION

• Acknowledgement of the existence of corruption.
• Develop and put in place appropriate strategies,
  policies and legislation.
• Promotion of awareness of evils of corruption
• Enforcement of anti-corruption laws.
• Ensure adequate funding to revenue agencies
• Efficient and equitable provision of social
  services.

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CONCLUSION

• Corruption is real and there is need to minimise
  its incidence. All efforts must be targeted at
  its eradication with the utmost energies and
  resources.
• Thank you, all.

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Thank You