Zambia in K1.4bn surplus tax

ZAMBIA Revenue Authority (ZRA) has recorded a surplus of over K1.4 billion from various taxes during the first quarter of 2014.
The net tax amounted to K7.078 billion against a target of K5.646 billion, recording a surplus of K1.431 billion.
ZRA commissioner general Berlin Msiska said the surplus recorded in the period under review is attributed to the positive performance recorded on domestic value added tax (VAT), pay as you earn (PAYE), company income tax and withholding taxes.

Of the total collections, K3.46 billion was from income tax, K632.2 million was from excise duties, K1.92 billion was from trade taxes and K1.04 billion was from domestic VAT while total domestic and import VAT posted K2.48 billion in collections.
“The factors attributed to the revenue outturn in the first quarter of 2014 include the favourable outturn of the domestic VAT attributed to increased enforcement activities following the strengthening of the VAT administration. Upward salary adjustments by a number of employers and increased levels of employment such as in road construction projects across the country boosted the PAYE outturn,” Mr Msiska said in response to a query yesterday.
He said the strong performance of company tax was largely on account of increased payments of provisional taxes by some mining companies following the exhaustion of their accumulated capital allowances in 2013.
“Furthermore, the awarding of performance bonuses in the private sector during the last quarter of 2013 contributed to the surplus in the first month of the year. There was also a significant increase in PAYE arising from newly-created employment,” he said.
Mr Msiska said withholding tax is attributable to the maturing of treasury bills and government bonds during review period.
He said the tax was boosted by the strengthening of tax administration of withholding tax on rental income through excluding rental income from the turnover tax regime and making it a final tax resulting in improved compliance by the taxpayers.
“Import VAT outturn during the first quarter was below target on account of lower than projected growth in taxable transactions, which grew by 4.1 percent in the review period compared to the projected growth 8.4 percent.
“The slow growth in the imports is attributed to the depreciation of the Kwacha which started in October 2013. A number of importers could have reduced their placement of imports in anticipation of stability in the exchange rate after the festive season,” he said.