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Alba Iulia
Tuesday, January 21, 2020

Government still owes K2.4 billion in unpaid VAT refunds to mining firm

Economy Government still owes K2.4 billion in unpaid VAT refunds to mining...

Commissioner General Kingsley Chanda
Commissioner General Kingsley Chanda

Zambia Revenue Authority has disclosed that it is still withholding K2.4 billion of the K5 billion owed to mining companies in Value Added Tax refunds because the correct documentation has not been provided.

ZRA Commissioner General Kingsley Chanda said Government began paying up to K800 million a month in VAT refunds to mining companies in June.
He said this during a news conference held in Lusaka.

Mr Chanda said Government is aiming to put an end to a long running dispute in which firms were owed about $700 million.

He however said that some funds are being withheld because companies have not provided documents showing the export destination.

The ZRA Commissioner General also disclosed that the tax authority lost K1 billion in expected tax collection because of low copper prices and the depreciation of the kwacha this year which hit mining companies.

He said ZRA has made progress in collecting revenue despite not receiving 1-billion Kwacha in income tax from the mines owing to economic challenges following a slump in copper prices.

Mr. Chanda said he is optimistic that in 2017, ZRA will meet its tax obligations following some changes to the tax system in the national budget.
Meanwhile, ZRA says it is pursuing over 72,000 vehicles that do not appear in its asycuda system.

ZRA Commissioner General Kingsley Chanda said preliminary database reconciliation and identification of wanted vehicles by the authority and Road Transport and Safety Agency as at 9th December 2016 indicate that 72- thousand 8-hundred and 42 vehicles have no matching records.

He said the over 72,000 vehicles, which is 19.1 percent of the registered vehicles include high value automobiles which have not taken advantage of the amnesty to normalise the situation.

Mr. Chanda adds that the motor vehicle amnesty to normalise the situation is still underway and will end on December 31st.

He has appealed to motorists with vehicles that were not cleared with ZRA to do so as they will not be fined or pay interest but just normal tax.

Mr. Chanda also revealed that the Commission has received only 146 applications from 8 stations for the amnesty from which it has collected K1.4 million.

He has however stated that ZRA is expected to collect K3.6 million from the exercise as pending assessments are in excess of K2.2 million.

The ZRA Commissioner General has since warned those who will not adhere to the amnesty that their vehicles will be impounded and forfeited to the state.

Mr. Chanda said ZRA will come up with the final “most wanted list” after December 31st 2016.

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  1. Can somebody intelligent explain to me why govt is refunding VAT to mining companies. Isn’t every business supposed to pay VAT and other taxes?

    • Low copper price hit the mines that I agree but how did depreciation of the kwacha hit mines? Can someone educate me. Our mines trade in dollars.

    • its Complex, whenyou buy goods out side Zambia, you pay Import Duty, Import VAT and other taxes, you are allowed to claim back the VAT which you paid, if you are registered with ZRA, THEN EVERY TIME you sell any commodity, i.e spares, consumables ,diesel and certain services, you charge the mines VAT, so the mines are claiming the VAT which they paid to whoever, some of it was paid as Import, some of it as input VAT so the hold up is between ZRA and the mines. ZRA had disputed some of the claims and suspended refunds over time it accrued. this is the money they want to liquidate. i will give you an example. if you are in South africa, what ever you purchase, has 14% VAT when leaving at the airport, a customs officer will inspect the goods and stamp the receipts, then you go to…

  2. Kikiki we told you..so now why shouldn’t we close this pf-zra as it owes taxes too. Meanwhile political hatred led to closure of post. Anyway mast is here to stay. You cannot hide the truth

  3. VAT is refunded on exports because those goods do not technically enter the zambian economy…..they are aids to manufacture which are subsequently exported.

  4. Why can’t the ZRA offset its VAT refunds against the royalties the mines pay. A portion of the royalties is retained by mining companies to GRADUALLY reduce the amount that ZRA owes. This way both parties get cash flow.

    • Just pay up!

      Or is this PF Government telling us LIES AGAIN?

      The money has been used for something else like Lungus international travels or been stolen and ZRA is using these excuses not to pay.

      The mines will have to wait until they borrow more kaloba!

  5. If ZRA and mining companies are having difficulty in obtaining final destination details because of sales thru agents, why not let the agent lodge his country of destination documents “in confidence” and the mines sales documents relating to the contract be lodged”in confidence” then the the ZRA matches and transactions verified and VAT refunded..
    Maybe mines might be encouragedto fund a computer program to facilitate the procedure as it will benefit them in the long run

  6. Off sets are always done with regards to all tax types. I can see a lot of ignorance from some you guys on this forum.

    • Then if you know so much why don’t you explain in plain English to some of us ignorants….not every one is an economist or accountant.

  7. So, in short Govt owes KCM millions of dollars? And the same Govt owes those KCM unpaid Contractors as well?

    So, KCM is basically doing to the Contractors what has been done to them by Govt. This is indeed Govt leading by example, but completely in the wrong direction.

  8. there, Goverment needed to verify the VAT claims they had asked for invoices, some are genuine some are inflated, on KCM not paying contractors, KCM is either being crooked or its insolvent. they just dont have the money.

  9. With $2.9 billion in debt covenants and inter-company loans due in 2016 Vedanta is turning to increasingly controversial and irregular methods to bleed cash from its few profitable subsidiaries. Having already asset stripped the Zambian Konkola Copper Mines, being prevented by an employees union from getting access to Hindustan Zinc Ltd’s $4.6 billion cash reserves, and by shareholder action from getting hold of Cairn India’s cash, Vedanta are now paying themselves ridiculous 1200% dividends in a desperate attempt to grab the cash and keep the lenders happy.

    Vedanta Ltd was India’s second most indebted company in June 2015 with $12 billion of debt. Parent company Vedanta Resources has a net debt of $8.6 billion (Jan 2016) and inter company loans of $1.8 billion. The Wall Street…

  10. Indeed Chiwamila galu kuluma mbuzi not mbuzi kuluma galu. This Govt closed The Post Newspaper over tax issues and yet it owes businesses billions in tax refund. This now explains why KCM in retaliation has withheld payments of millions it owes to local suppliers only and not foreign suppliers. It looks like while Yaluma may yap in public with fake non lethal threats, behind closed doors, his hands get twisted by KCM as it demand for its VAT refund.

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