The Bankers Association of Zambia has expressed grave concerns at the way the Zambia Revenue Authority (ZRA) has gone about implementing the newly-introduced law requiring every bank account holder to have a T-PIN (short for tax-payers identification number), saying banks are not ready.
The PF wants to be deducting tax from every bank account holder in Zambia for merely having an account and for every deposit or withdrawal. The first stage is to register everyone then start charging. Right now they are lying that they just want to keep records, something that does not make sense because if that was the purpose, why use ZRA?
BAZ CEO Leonard Mwanza said while banks were aware of the introduction of the regulation, there had been no consultation with the ZRA on how this was going to be done before the tax collector implemented the regulation with little more than an instruction for banks to ask their clients to provide a T-PIN.
“We are actually on the same page with the general public on this one, because even us, we were merely informed that we ask customers to provide T-PIN, so our role is to ask clients to submit their T-PIN. We know we do not have a legal authority to register them for T-PIN we can just guide them to go to their website or go to their offices,” he said.
The upshot is that two months after the rule was effected, only 244,000 people of the 3,000,000 account holders with Zambian banks had registered, a number that Mr Mwanza described as disappointing.
A senior Bank of Zambia official who declined to be quoted said he was shocked at the way the ZRA had handled the whole process of implementing the new regulation which the tax collector has explained as a means to track down tax evaders and avoiders to ease public suspicions that the government was trying to sneak another tax on bank account holders.
Mr Mwanza said the association had written to ZRA to extend the time frame in which the regulation was to be implemented as well as to allow for more extensive consultations among all key players and also to give time for a campaign to explain the requirement to a suspicious public.
Among the concerns the BAZ wanted addressed was the potential of the T-PIN requirement working against the financial inclusion agenda being spearheaded by the Bank of Zambia (BoZ).
“Our major concern is on the financial inclusion agenda… they have introduced a policy of T-PIN, which really goes beyond against the financial inclusion initiative because now what they are saying is
that if you don’t have a T-PIN, you cannot have a bank account,” he said.
He said better consultation and analysis of the policy should have been undertaken before arriving at it because the majority of the Zambians did not have T-PINs, let alone awareness of their need for it.
“Firstly, we would like to state that banks are not compliant with the new tax policy directive introduced by ZRA in January this year. Secondly the majority of customers do not have T-PINs so they cannot provide the T-PIN,” he said.
For banks to be compliant with the regulation they would have to incur additional costs to upgrade their systems and increase on the man-numbers for the process to work.
“Thirdly, banks have to incur additional cost to upgrade our systems to accommodate the processing of this TPIN. This is financial problem for us as the banking sector that is why we have written to ZRA to consider extending the time frame in which this matter of T-PIN should be implemented,” Mr Mwanza said.
He said despite the issues being raised about the T-PIN, was positive that they would all be resolved in the interest of everyone involved but stressed that the ZRA needed to come up with the national public awareness campaign to educate the people on why they regulation was introduced and what they need to do to get the T-PIN.