Thursday, June 13, 2024

ZRA loses case involving K1.6 billion


THE Industrial Credit Company Limited (ICC) has won a case in which it appealed against the Zambia Revenue Authority’s assessment of value added tax (VAT) valued at K1.6 billion.

The Revenue Appeals Tribunal (RAT) also ordered that each party meets its own costs.

Facts before the tribunal are that on February 26, 2002 the ICC received a letter from ZRA station manager – Ndola VAT Moses Nkandu.

In the letter, ZRA indicated that its pre-visit review of the company’s file revealed that it had not been declaring VAT on finance charges since February 2001, the total output VAT being K1, 730,762,199.03 with interest of K381.8 million.

After the inspection, ZRA informed the ICC of their intention to re-visit their earlier assessment of June 27, 2002 and accordingly proceeded to issue a revised assessment dated April 14, 2004 in the sum of K1,617,889,474 being K1,224,663,031 principal and interest of K393,226,443.

The tribunal said there is no dispute that the return lodged by the ICC was incorrect or inadequate and that the initial assessment made by the ZRA in 2002 was based on an incorrect or inadequate return but the issue was to determine the validity of the replacement assessment of April 2004.

The tribunal disagreed with ZRA’s submission that the evidence that led to the April 2004 assessment was the credibility inspection of December 2003, adding that the February 2002 was in its view unequivocal and straight to the point as it identified the cause of the incorrectness of the ICC’s return as being the application of a wrong Statutory Instrument.

The Tribunal was presided over by former vice chairperson Ngosa Simbyakula sitting with Marian Munyinda and Mary Ncube.

“We therefore have no difficulty in finding that February 26, 2002 was the date on which the respondent (ZRA) first became aware of the incorrectness of the appellant’s (ICC) return and that the two-year time period began to run from that date. We therefore find that the April 2004 assessment was done outside the two year time period,” part of the judgement read.

ZRA was represented by its legal officer Theresa Kampata while ICC was jointly represented by Eric Silwamba and Company, and Deloitte and Touche.

ICC contended that the time or date when the ZRA first became aware of the incorrectness or inadequacy of the ICC’s return should be taken to be February 26, 2002.

Mr Eric Silwamba submitted that the matters raised in the credibility report were not new at all but were in fact matters that had been subject to exhaustive and extensive negotiations between the two parties from February 2002 to June 2002 and were as such conclusively disposed of.

Mr Silwamba stated that it is the ICC’s submission, therefore, that the assessment issued by the ZRA on April 16, 2004 in the sum of K1,617,889,474 was issued after some two years one month and some weeks after the ZRA through one Mr Nkandu informed the company by his letter he was aware of the incorrectness of its return and that on that premise the assessment is void and of no effect.

[Zambia Daily Mail]


  1. Where are the laws to deal with the theft of these public servants based at the boarders. They just guess on the import duties and demand akanyampuku? Somebody help our sinking mother Zambia

  2. ZRA has lost and won so many cases some involving even bigger amounts than in this case … so what’s special about this one?

Comments are closed.

Read more

Local News

Discover more from Lusaka Times-Zambia's Leading Online News Site -

Subscribe now to keep reading and get access to the full archive.

Continue reading