ACTIONAID Zambia has called for the immediate arrest of all public officers found wanting in the 2016 Auditor General’s report.
Country director Nalucha Ziba said at a press briefing yesterday that the resources, if expended on needy and priority areas, would have led to the improvement of lives of many Zambians wallowing in abject poverty.
“We note with sadness that despite the increase in misappropriation and misapplication of public funds as evidenced by the trend in the AG’s report of 2014, 2015 and 2016, we evidently have a weak public procurement system that has resulted in questionable contracts being awarded for the provision of goods and services to government,” Ziba said.
She implored the government to put in place stringent measures that would call for increased accountability and transparency in the public procurement process.
“This measure will in turn enhance effective resource distribution. It is ActionAid’s appeal that our leaders be held accountable for public resources and exercise transparency in all these processes. The secrecy surrounding expenditure and procurement has led to erosion of trust of our leaders and this has an effect on effective delivery of services,” Ziba said. “These misplaced priorities has led to many people being unable to access the basic services that government should provide, such as proper school infrastructure and learning materials, health care services and safe and clean drinking water to mention but a few.”
She said the accounts of misapplication of funds raised in the Auditor General’s Report affect the majority of Zambians as public service delivery was compromised and was evidence that the government was not prioritising the immediate needs of the people.
Ziba said the government had to date not put in place strong internal control measures to ensure accountability.
She noted with dismay that the provision of public services to the needs of the people of Zambia was being undermined by a few individuals that have decided to take advantage of the weak government structures by misappropriating public resources.
“Therefore, we would like to concur with finance minister Felix Mutati that all those found wanting in the Auditor General’s report must be prosecuted and pay back the money they have ‘stolen’. We demand answers and government’s commitment to ensure that the law enforcement agencies will bring the culprits to book. The crimes committed by a few selfish individuals should face prosecution despite existing loopholes in the public finance Act,” she said.
Ziba said with all the revelations in the 2016 Auditor General’s report, it was evident that there was a “wasteful” public service system that spends more resources than the services it delivers.
She urged the government, through the Ministry of Finance, to expedite the process of amending the Act in order to strengthen systems in government institutions.
Ziba also said taxation was the most reliable way for an economy to raise money to finance public services and it was commendable that the government through ZRA had over the years embarked on tax reforms aimed at easing tax payment and generating more tax revenue such as the Tax Online systems, appointments of tax agents.
“However, more can be done. The recent revelations in the Paradise Papers make references to public officials, private individuals and corporates investing in tax havens and offshore accounts. It is necessary that international transactions relating to tax havens are scrutinised for tax purposes. Why then should civil society organisations be worried about financial transactions relating to tax havens and offshore accounts; because the question of illegality and morality is put into effect? The illegality aspect of shifting funds to tax havens stems from the fact that the profits accrued are not subject to audit and scrutiny by the Anti-Corruption Commission in the case of public officials and also ZRA, the Auditor General’s office and other State auditing agencies for tax malpractices in the case of private individuals and corporate,” she said.
She said the morality aspect stems from the fact that non-residents who shift the profits have a moral compass that guides in declaring their profits so that they face a tax liability, which mandates them by law to do so.
Ziba urged the government to investigate High Net-Worth Individuals (HNWI), corporate bodies and public officers operating offshore accounts and investing in tax havens.
“To this effect, those engaged in illegal financial dealings should be criminalised. Government should take action to increase transparency in our tax system, starting with a public register of a beneficial ownership. This policy would reveal the true owners of anonymous companies and trusts, shining a light on the tax. In addition, government should close all the loopholes that allow for tax avoidance,” said Ziba, adding thatActionAid was not calling for the arrest of certain individuals but that any illegal financial transaction should be criminalised as a lot of tax revenue is being lost by such.