Government has cancelled the tax deferment facility awarded to Varun Beverages and ordered the Pepsi manufacturing company to immediately refund a total of K15 billion that accumulated over the last two years when the provision was made by the MMD Government.

Finance and National Planning Minister, Alexander Chikwanda, announced this when he released the report by the Kingsley Chanda Commission of Inquiry appointed by President Michael Sata in November last year, to probe irregularities at the Zambia Revenue Authority (ZRA).

Mr Chikwanda said at a media briefing in Lusaka yesterday that Cabinet, at its meeting held at State House on Wednesday, resolved that all those named in the report should be prosecuted.

He said Varun Beverages had been informed to pay all outstanding tax arrears and that criminal investigations would be instituted on persons found wanting for unlawful conduct.

The K15 billion in deferred taxes that has accumulated since 2010 was awarded by former minister of Finance and National Planning Situmbeko Musokotwane.

Mr Chikwanda also announced that the contract for the operation and maintenance of detection scanners at some border posts has been terminated and that the same applied to the contract awarded by the previous government to Bradwell International to operate and maintain the Nuctech scanners.

The minister said the requirements for the installation and operation of scanners would from now, be met by the Government which had also taken over the Kasumbalesa border project and the concession order.

The committee during its sittings in Lusaka expressed deep worry that the management of the country's borders could be granted to a foreign firm describing it as a security risk.

The minister announced that all border concessions for Jimbe, Nakonde, Kipushi and Mwami that were granted to one concessionaire had been cancelled while the responsibility to develop infrastructure had reverted to the Government.

The Government has also taken over the Nakonde border infrastructure development project which was concessioned under the Public Private Partnership (PPP) arrangement when it had reached 75 per cent completion (at roof level) worth K23 billion of certified works using government resources.

The other contract cancelled relates to that awarded to Hallmark on the management and maintenance of the border infrastructure at Chirundu.

The Ministry of Transport, Works, Supply and Communication should handover the infrastructure to ZRA.

Mr Chikwanda said all policies and legislation dealing with the awarding of public contracts would be revised, particularly the PPP policy because its Act was defective and at variance with the Zambia Public Procurement Authority (ZPPA) Act.

The minister said the role of the Council of Ministers under PPP should be reviewed and reduced to policy guidance while the awarding of tenders should be retained by the ZPPA.

Mr Chikwanda said the PPP unit at the Ministry of Finance would be restructured administratively to enhance efficiency while the ZRA tax collection strategy and organisational structure will be put together.

The minister said Government would operate within the law while acting with expedition to put in effect the recommendations of the ZRA commission of inquiry.

"Government has no scores to settle and 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

upon them," Mr Chikwanda said.

-2004-Late president Levy Mwanawasa's delegation visits China and negotiates a loan for scanners to enhance revenue collection at borders to help improve Gross Domestic Product (GDP).

Dr Mwanawasa delegates his Vice-President, Rupiah Banda, to handle the scanner project with the Chinese government.

-2009-Mr Rupiah Banda negotiates an additional US$25 million loan from China for the procurement of scanners.

This was after late President Levy Mwanawasa had earlier sought an initial loan of US$100 million.

-2009-Criticles Mwansa justifies that single sourcing was needed because of urgency in procuring scanners.

However, by November 2011, only one scanner had been procured and deployed to Chirundu which defeated the justification for single sourcing.

-13 October 2011-President Sata suspends former commissioner general Wisdon Nhekairo and announces intentions to set up commission of inquiry to probe irregularities at ZRA.

-29 October 2011-Berlin Msiska reappointed commissioner general at ZRA.

-November 30, 2011- President Sata forms commission of inquiry headed by Kingsley Chanda. Other members are Katema Mutale, Sangayakula Sangam Peggy Mulongoti, Fredrick Chishala and Agness Musunga.

-10 November, 2011-ZRA director of administration tells commission that Mr Criticles Mwansa wrote correspondence to ZPPA that the institution should single source cargo scanners.

-17 November, 2011-Mr Mwansa tells commission that MMD government directed ZRA to single source.

-11 November, 2011-Ministry of Finance director for investment Michael Mwanga names Mr Rupiah Banda as having arranged additional US$25 million loan for scanners.

This was when he appeared before the commission of inquiry.

-January 26, 2012-Alaxander Chikwanda announces cancellation of contracts with border firms and Government through ZRA must manage the facilities with immediate effect.

Varun Beverages tax concessions

-2010-Former Finance Minister Situmbeko Musokotwane grants tax concessions in favour of Varun Beverages Limited.

-2009-Dr Musokotwaneís firm, ZamBuild investment limited is engaged to supply building materials to Varun Beverages.

-January 26, 2011-Dr Musokotwane admits that ZamBuild investments limited supplied building materials for the construction of Varun infrastructure but this was not influenced by the tax holiday