The Zambia Institute of Chartered Accountants (ZICA) has noted mismanagement of public funds, warning that the country risks undermining development goals if urgent reforms are not implemented.
Speaking during the first quarter media briefing, ZICA President Yande Siame Mwenye cited poor use of Constituency Development Funds (CDF), inefficiencies in tax administration, and weak accountability frameworks as key national challenges.
Ms. Mwenya Highlighted findings from the 2023 Auditor General’s report, she revealed a concerning mismatch between the intended use of CDF and actual spending patterns. While only 41.9% of the funds were used for community development projects, a staggering 98.2% went to administrative costs. This imbalance, the Institute says, undermines the purpose of CDF allocations and fails the communities they are meant to serve.
The funds, which have steadily increased from K1.6 million per constituency in 2021 to K36.1 million in 2025, are not yielding corresponding developmental results. ZICA attributed this to limited capacity at the local authority level, lack of skilled personnel, and insufficient oversight mechanisms. The institute has called for trained accountants to be embedded in all constituencies to enhance financial management and accountability.
“We cannot continue increasing budget allocations without fixing the governance structures. Constituencies need both financial muscle and technical capacity. Otherwise, we’re pouring water into a leaking bucket,” Mwenye stated. ZICA has also proposed the introduction of digital tracking tools to monitor project execution and curb irregularities.
Mwenya also pointed to Zambia’s underperforming Value Added Tax (VAT) system as a major hindrance to domestic resource mobilisation. Challenges such as refund delays, rampant tax evasion, and weak enforcement in the informal sector continue to plague the system. The Institute believes that these shortcomings deter business growth and diminish public confidence in tax institutions.
To address these issues, ZICA has recommended a simplified VAT structure with fewer exemptions, faster and automated refund systems, and increased use of Smart Invoices and Electronic Fiscal Devices (EFDs). It also proposes targeted compliance support for SMEs to ease the burden of tax filing and increase voluntary compliance.
Another critical concern raised was the recently introduced Advance Income Tax (AIT), which imposes a 15% levy on remittances above $2,000 for individuals or companies without valid Tax Clearance Certificates (TCCs). ZICA acknowledged the policy’s intention to curb illicit financial flows but cautioned that it could penalize legitimate exporters and remitters if not well implemented.
To ensure fairness and effectiveness, the Institute has called for the urgent development of a single national identity system. According to ZICA, such a system would streamline tax compliance, improve tracking of financial transactions, and enhance inter-agency data sharing. “With a unified digital identity, we can link taxpayers to real-time data and reduce manipulation of the system,” Mwenye said.
ZICA believes that better data integration between the Zambia Revenue Authority, customs, and financial institutions will significantly reduce revenue leakage. A centralized system would also provide accurate statistics for policy-making and improve enforcement of tax laws.
Beyond tax and CDF concerns, ZICA expressed disappointment over ongoing delays in project execution across various sectors, especially in agriculture and energy. The Institute warned that failure to address mismanagement and inefficiency could hinder economic recovery efforts and prolong citizen suffering, especially in rural areas.
ZICA also commended the Auditor General’s Office for the comprehensive CDF audit report, stating that such transparency is essential for democratic accountability. However, the Institute emphasized that audits must be followed by action and not left to gather dust on government shelves.
The organization reiterated its readiness to partner with the government in capacity building, tax policy reform, and public finance management. It urged authorities to strengthen laws against financial misconduct and ensure that those responsible for mismanaging public resources are held accountable.
Mwenye furthermore stated that, “We must seize this moment to build an economy that is ethical, inclusive, and future-fit. ZICA will remain a committed partner in driving transparency, efficiency, and sustainable growth.”
