Government has resumed paying value-added-tax (VAT) refunds to mining companies, putting an end to a long running dispute.
Mines Minister Christopher Yaluma told Reuters on the sidelines of the Zambia Mining Investment Forum in London that government is very committed to repaying the VAT refunds.
Mr Yaluma said government had started paying to clear the debacle.
Vedanta’s chief executive Tom Albanese, a delegate at the event, confirmed that the government had resumed some payments.
Mr Albanese told Reuters on the sidelines of the conference in London that government is beginning to pay back on invoices post February 2015 on a case by case basis.
A source at another mining firm, who declined to be named because he was not authorised to speak to the media, also said the Zambian government had started some VAT refund payments, although small.
Mining companies had claimed for months that they were owed more than $600 million in VAT refunds and in February the government decided to relax the rule requiring exporters to produce import-export documents to claim the refunds.
Blood.y scarcely conceivable!
No wonder we are broke n rushing to capital markets to borrow. So $1bln of the $2bln wil go towards paying VAT refund. Ba PF sure. Yashani iyi. Using kaloba to pay nkongole. God forbid.
Borrowing from one lender to clear nkongole of another. In the meantime, mortgaging the inheritance of the future generations!
Very soon the slumped Copper production in all the mines we have seen in the last few months will pick up and yet Zambians will only inherit potholed and gravel filled roads. Zambia is “cursed” to have Copper and other metals. No wonder they are hidden in the deeper belly of the earth. Soon you will hear praises for this government from the western world over these vat, royalty tax jargon….
Now that the debt ceiling has been raised all hell will break loose. Even the chickens will be refunded for the eggs they laid…
It had to take us carry out all these measures.Sata and Chikwanda derailed the economy.We could be down now but will not be down forever.Thank God for EL and his new team.Soon Zambia will be back on track.Most Zambians do not understand the fact that Zambia was headed for distraction for having voted for Sata.
HE President Lungu passed with distinction when he did law at UNZA.
His training and education is finally paying off.
I’M PROUD TO BE A ZAMBIAN…and share in her success under President Lungu. Our best president ever!
Chikwanda’s idea in the first place was very good: Increase mineral royalties to pay off VAT refund claims
I do not really grasp the rationale behind VAT refunds. I’m not an Economist. I just have questions to clear my mind over VAT refunds.
1. Why doesn’t the GRZ just get paid VAT due to it instead of getting overpaid in the first instance only to refund part of the VAT to mines later?
2. Isn’t this costly cos there are bank (transfer) charges 2both GRZ & Mines when Mines pay GRZ & refund Mines? Either way the Banks reap bigtime. Mines pays GRZ & incur bank charges & stupidly GRZ refunds VAT 2mines only to incur transfer charges on the same VAT. These small charges overtime add up2 collossal costs by both GRZ & Mines but good business profits to Banks.
Continued:
Its like me knowingly selling overpriced goods & get paid by cheque only to refund a customer some discount by cheque. Either way Banks earn from charges but I get less by each bank charge & customer pays a little more by each bank charge. What’s the logic?