REPUBLIC OF ZAMBIA

CABINET ACCEPTS RECOMMENDATIONS OF THE COMMISSION OF INQUIRY INTO THE OPERATIONS OF THE ZAMBIA REVENUE AUTHORITY Cabinet at its sitting on Wednesday 25th January, 2012 accepted without reservations the report on the findings of the Commission of Inquiry into the operations of Zambia Revenue Authority. Cabinet has deemed it desirable and expedient to reverse fraudulent procurements regarding Zambia Revenue Authority related contracts with Bradwell International, and Cargo Scan. Further, Cabinet has directed the reversal of the concession of the borders namely; Kasumbalesa, Nakonde, Jimbe, Kipushi, Mwami and Chanida and the reversal of tax concession offered to Varum Beverages Limited, the promoters of the Pepsi Zambia Project. In addition, Cabinet has directed the implementation of other administrative measures incidental to the same as recommended by the Commission of Inquiry. Consequently, Cabinet has ordered with IMMEDIATE EFFECT: a) That the Cargo Scan contract on the operations and maintenance of Smith Detection scanners be terminated; b) That the Bradwell contract on the operation and maintenance of Nuctech scanners be terminated; c) That Nuctech be compelled to perform their contractual obligations of installation, operation and maintenance of eight scanners; d) That the pre-requisites for the installation and operations of scanners be met by government e) That ZRA assumes ownership of the scanners and work out appropriate measures for loan repayment for the scanners; f) That the Government takes over the Kasumbalesa border project and reverses the concession of the border;

g) That five border concessions of Jimbe, Nakonde, Chanida, Kipushi and Mwami to one concessionaire be cancelled and that government takes up the responsibility of development of infrastructure at those borders; h) That Government immediately takeovers the Nakonde Border infrastructure development project which was concessioned under a PPP arrangement when it had reached 75 percent completion (roof level) worth K23 billion of certified works using government resources; i) That all policies and pieces of legislation that deal with awarding of public contracts be revised in particular the PPP policy and its Act is defective and at variance with the Public Procurement Act; That the role of the Council of Ministers under PPP Act should be reviewed and reduced to policy guidance while awarding of contracts should be retained by ZPPA in consultation with the Attorney Generals office;

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k) That the PPP Unit in the Ministry of Finance be immediately restructured and administratively re-organised to pave way for its directiveness and effectiveness;

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That the tax deferment for Varum Beverages Zambia Limited be revoked and company be made to pay outstanding tax arrears and criminal investigations be instituted on persons found wanting for unlawful conduct;

m) That the Hallmark contract on the management and maintenance of the border infrastructure at Chirundu be cancelled and the Ministry of Transport, Works, Supply and Communication hands over the management of the Chirundu Border infrastructure to ZRA; n) That an urgent review of the ZRA revenue collection strategy and organisational structure be made; o) That appropriate action be undertaken based on the Commission findings with regards to the role played by some individuals whose names, positions and reasons are provided for in the report. While Government will act with requisite expedition to put into effect the recommendations of the Commission of Inquiry in the conduct of ZRA, every conceivable measure will be taken to ensure that all actions are strictly in conformity with the law. Government has no scores to settle but there will be no sanctuary given to those who have committed crimes against society through fragrant abuse of office and trust which the people of Zambia reposed in them. _____________________________________________________________________ Issued by: Hon. Alexander B. Chikwanda, MP MINISTER OF FINANCE AND NATIONAL PLANNING

26th January, 2012