ActionAid warns Zambian Government of VAT consquences

signing of a Double Taxation Agreement avoidance between the UK and Zambia
signing of a Double Taxation Agreement avoidance between the UK and Zambia
ActionAid Zambia says Government should consider the consequences of retracting the previous agreement they made with the Zambia Revenue Authority (ZRA) regarding the conditions which should be met by exporters in order to qualify for VAT zero rating of exported goods.

ActionAid Economic justice project officer Kryticous Nshindano in a statement made available to QFM News says government should set political and personal interests aside when considering the issue.

Mr Nshindano says the call and subsequent decision to revoke the requirements to provide proof of transactions for exports is not based on strong, substantive and convincing grounds.

He says there has been no explanation as to why it is difficult for mining companies to disclose where they sell their products and at what price.

Mr Nshindano says ActionAid is of the view that the requirements and conditions put across by ZRA to affect refunds are realistic and made in good faith, bearing in mind that some companies take advantage of any gaps in the tax regimes to dodge paying fair share of their tax obligations.

He says ActionAid believes that the conditions instituted by ZRA aim at addressing information asymmetry and promote transparency with respect to the actual prices of the exports which may be useful in countering creative accounting and negative tax planning often used by some companies to evade paying fair share of their tax obligation.

Mr Nshindano adds that the disclosure of information ZRA is asking for is useful in auditing and computation of corporate tax bearing in mind that many big companies have been year in and year out declaring losses.

He says it is unfortunate that whenever there is effort to bridge gaps and loopholes being exploited by big companies to avoid and evade taxes,leaders quickly back track on their resolve to address these gaps.

Mr Nshindano notes that Multinational companies regularly deprive Zambia of vital money that could be used for much needed public services such as education and health.

He states that measures must be taken to close the tax loopholes that facilitate this and that not implementing VAT rule no. 18 deprives the country of the revenue needed to provide basic services for majority of the citizens.

( Friday 05th September 2014 )