The Zambia Revenue Authority (ZRA) has continued engaging key stakeholders from both the public and private sectors before replacing the Value Added Tax (VAT) with a non-refundable Sales tax, which takes effect in July this year.
ZRA Commissioner General Kingsley Chanda revealed that refund claims under the Value Added Tax (VAT) have increased to K1.4 billion from K 774 million per month, following the announcement of the introduction of the Sales tax which will come into effect in the third quarter of this year.
Mr Chanda explained that the escalation of VAT refunds was a serious revenue exposure for the government.
Speaking at the Deloitte Sales Tax bill discussion in Lusaka yesterday, Mr Chanda said the business community have until July 18th 2019, to submit their VAT refund claims, few days to the implementation of the Sales Tax.
“Government needs to operate, so the commitment is to pay US $80 million which is around K1 billion at the current exchange rate. This means that every single month ZRA accumulates arrears of between K400 million to K500 million which becomes a huge exposure on government,” he said.
He further disclosed that ZRA currently has 800,000 registered businesses out of which only 16,000 are registered for VAT, saying that the business community should re-organise themselves if they are to remain in business.
Meanwhile, several delegates at the discussion took turns to ask questions to the ZRA team regarding the tax exemptions, penalties and punishment to smugglers.
In response, Zambia Revenue Authority Commissioner of Domestic Tax Moses Shuko cited exports and capital goods as among items that are among the exempted tax.
Mr Shuko explained that the commission will impose penalties on non-compliant entities.
He emphasized that the Sales Tax is a progressive approach as it will have great benefits to the country’s economy and should be embraced by all well-meaning Zambians and business community.