Zra Uniforms

Zambia Revenue Authority (ZRA) Anti-Smuggling squad.

ZAMBIA Revenue Authority Commissioner General Kingsley Chanda has disclosed that the authority owes about K22 billion in Value Added Tax (VAT) refunds dating as far back as 2009.

 And Chanda has called for reforms on the Value Added Tax to help address huge amounts of money that is being paid in refunds.

He said ZRA is paying approximately K1.4 billion monthly with about 70 per cent of that being refunds to the mines.

Chanda has stated that VAT, which is continuing after the sale tax was abandoned, creates debts for government because it is a refundable tax which is paid by the consumer.

“It is not conducive to have a tax that creates tax debts for government. The problem with VAT is that it is a refundable tax especially for businesses, ultimately to be paid by the consumer. If there is no corresponding capacity on the part of government to refund VAT, then you start creating debts. That is how we ended up with K 22 billion and it is increasing,” Chanda said.

"When the money goes to government, government has serious competing needs; they need to finance government operations, pay salaries, pay debts and so on, so you find that increasing and over the years, the money that is required to refund is not constantly available.”

He is, however, optimistic that ZRA will meet its target but expressed worry on issues such as power outages and attacks on truckers.

“The refund arrears are escalating and once those become unsustainable for business, they are likely to have challenges to pay other tax obligations such as Pay As You Earn and company income tax. Once we also have power supply stabilized, we are confident of meeting our target,” said Chanda.

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