THE Post Newspaper, owned by Fred M’membe continued to cheat on its tax obligations long after obtaining a court order stopping the Zambia Revenue Authority (ZRA) from seizing its property for a K22billion tax bill accrued over years of non compliance.
The paper, somehow, obtained two court orders stopping the ZRA from collecting the full amount owed in one installment and later in December 2014 obtained another “exparte order” preventing ZRA from making any decision or taking any steps which could be adverse to the paper until after judicial review hearing.
Since then according to court records the paper continued to cheat on its tax obligations by omitting some of the names of its employees when filing PAYE returns thereby under-declaring the tax due under PAYE.
So bad was the situation that the ZRA was forced to return to the High court in May this year to seek an interpretation on whether or not the Post newspaper, on account of the orders, was not supposed to file complete tax returns and pay Income Tax (Pay as You Earn) and not to pay taxes on the due dates for the period after the order was granted.
“That in view of the foregoing, the respondent has come to this honourable court to seek the court’s interpretation of the Applicants order of Stay on whether the said Order granted to the applicant prevents the applicant from filing correct returns and paying the current taxes due to the respondent. In addition, whether the Respondent is precluded from performing its functions of assessing and collecting the current tax due to the applicants.” The ZRA applied.
The ZRA protested that the Post had failed or neglected to pay PAYE due despite being aware of its statutory duty to pay taxes and had continued to under declare the PAYE due on its employees.
According to an affidavit filed in the High Court by ZRA assistant director, processing and enforcement, Large Tax Payer Office Yvonne Mwanza, the Post Newspaper apart from neglecting to remit income tax to the agency, was not filing accurate returns and had continued to charge Value Added Tax (VAT) collected its clients.
Ms Mwanza has revealed that from the time the Post Newspaper obtained an order restraining the agency from seizing its properties as a result of defaulting in tax remittance, the newspaper had not been filing proper and complete tax returns on PAYE and had been omitting some of the names of its employees.
At the time of the application the Post Newspaper owed the Zambia Revenue Authority (ZRA) K12, 155,310 accumulatively from the initial tax liability of K22, 517, 952 inclusive of interest in unpaid tax obligations and penalties and has blocked the agency from seizing its properties through a court order.
In this matter, ZRA was seeking the interpretation of the court whether the Post Newspaper order restraining the agency from seizing its properties was also preventing the newspaper from filing correct returns and paying the current taxes accruing. Ms Mwanza said ZRA was also asking the court whether the same court order was stopping the agency from performing its mandated functions of assessing and collecting the current tax debt from the Post Newspaper.
“From the date the applicant obtained the stay of the respondent’s decision to disallow it from paying the tax due installments which debt is approximately K22,517,952.04 inclusive of interest and penalties as at the time of commencement of the action, the applicant has neglected to remit to the respondent the Income Tax in form of Pay as You Earn (PAYE) deducted from its employees. In addition, the applicant has continued to have Value Added Tax (VAT) collected from clients late, hence being charged penalties for late payment currently amounting to the sum of K578,086.55 and the applicant has a current outstanding tax debt due for PAYE to the respondent in the sum of K4,620,560.80 inclusive of interest and penalties,” Ms Mwanza said in her affidavit.