THE Zambia Revenue Authority has delayed plans to demand TPINs on all bank account holders after concerns by commercial banks that the move will force people to stop banking the money.
As part of an attempt to increase tax revenue collections amidst waning sources, ZRA had planned to, effective January 1 this year, make it mandatory for financial institutions registered in the country to require all bank account holders to obtain a Taxpayer Identification Number [TPIN].
But the move drew concerns from commercial banks in the country as well as Bank of Zambia.
According to the Bankers Association of Zambia, the TPIN requirements in the absence of active sensitization would hurt recent gains made in increasing financial inclusion, which currently stood at about 59.3 per cent from 37.3 per cent in 2009.
“The introduction of TPINs may pose a challenge in the quest by banks to achieve this goal, because not all would-be customers may have easy access to register for TPINs, meaning that those who are unable to register for TPINs will be on-boarded into the banking sector. We feel this will pose a major challenge towards achieving this goal,” according to the official reaction from BAZ. “We are also of the view that there was not much public awareness prior to the enactment on this new law. This has raised a lot of concerns from members of the public about the implementation of TPIN.”
BAZ warned that TPIN demands would also lead to an increase in the money circulating outside the banking sector.
“Currently, there is about K6 billion circulating outside the formal financial sector in the country, and the financial sector is working so hard to ensure that levels of financial inclusion are increased to ensure that more money circulates within the formal financial sector. Now with the introduction of TPIN, we may see an increase in the amount of monies circulating outside this sector, as a lot more people who have various concerns over TPIN may prefer to keep their monies everywhere else except in the banks,” stated BAZ. “This will also affect our quest to ensure that Zambia becomes a cash-light society. The more money circulating outside the formal financial sector, the more the costs for banks and it impacts negatively on the economy as well.”
In a signal of submission, ZRA commissioner general Kingsley Chanda said the implementation of the TPIN had been shelved until the end of the year.
“A technical team [between ZRA and BAZ] will be formed to work out details of how quickly people requiring to open bank accounts can be registered to TPINs and also how to deal with already existing account holders,” Chanda was quoted in a statement issued by ZRA media team. “So, after this technical committee has met, they will give us a roadmap on the way forward and we also have informed BAZ that we have extended the timeframe up to December 31, 2017. We are hoping that its adequate time for us to deal with outstanding of TPINs.” JC/News