We do not owe mining companies any money – Chanda
By Staff Reporter
THE Zambia Revenue Authority (ZRA) has cautioned companies that are evading tax, saying they are playing a dangerous gambling game.
And ZRA says an audit shows mining companies owe the government more money than what is due to them in VAT tax refunds.
Meanwhile, ZRA commissioner general Kingsley Chanda has disclosed that the Authority exceeded its revenue target of K44.7 billion for the 2018 financial year by K3.8 billion.
Briefing journalists at Taj Pamodzi Hotel in Lusaka yesterday, Chanda said it was certain that without a robust domestic revenue mobilisation strategy, Zambia would have no destiny.
He noted that since most of the companies, including mining firms, were privately-owned and that the government had either no shares or a minority stake, the only way majority Zambians could benefit fully from “their God-given resources” was through taxation.
“Therefore, tax compliance cannot be an option but mandatory. My management team and staff, with the support of our Board and the government, will ensure that all the taxes are properly collected and accounted for so that the benefits can accrue to all Zambians through social goods and services. Those who want to continue evading are playing a dangerous gambling game and we will soon catch up with them. Let us work together to support our nation development,” Chanda noted.
“The Authority’s performance in 2018 was exceptional across all our corporate strategic pillars. As we look forward to 2019 and beyond, I am mindful of the numerous challenges that we face, especially with regard to non-compliance by some taxpayers.”
On revenue performance, Chanda revealed that total revenue collections reached at K57.8 billion while total refunds amounted to K9.4 billion, thereby registering total net collections of K48.5 billion or 18 per cent of Gross Domestic Product (GDP) compared to the targeted 16.2 per cent.
Chanda was flanked by commissioner – finance Brigitte Muyenga, commissioner – domestic taxes Moses Shuko, commissioner – modernisation and corporate strategy Dingani Banda and commissioner – customs services Sydney Chibbabbuka.
“The positive performance is attributable to higher than programmed revenue collections under all three tax categories namely, direct taxes, indirect taxes and trade taxes which posted surpluses of K216 million, K1.6 billion and K1.97 billion, respectively,” Chanda said.
He further explained that out of the K9.4 billion that the ZRA managed to pay out in VAT refunds last year, 78 per cent was paid to the mining sector while 22 per cent was paid to other sectors in the economy.
“I’m confident that going forward, the outstanding VAT refunds will be a thing of the past once the goods and services tax (GST) is implemented later this year. Please note that all legitimate VAT refund claims will be paid after forensic audits, despite implementation of the goods and services tax after 1st April, 2019,” Chanda noted.
Chanda also highlighted the ZRA’s operational performance for 2018, ZRA corporate strategic plan for 2019 and the government support the Authority received.
Chanda said mining companies had been demanding between $550 M -$600M due to them in Value Added Tax (VAT) refunds but were owing government more in taxes and penalties.
“When we put together what we owe the mining companies compared with what they are owing, you find that on the balance of numbers they are actually owing more,” said Chanda
And Chanda did not say how much mining companies owed the state but said it included penalties and interest.