THE disputed K7.5 million Value Added Tax (VAT) believed to have been irregularly deducted from the terminal benefits of more than 3,500 retirees has taken a new twist.
Prominent Lusaka lawyer Nelly Mutti says the tax was slapped on legal services she rendered to Voluntary Separation Association of Zambia (VSAZ) and not on the benefits of the retirees.
It is believed that up to 16 per cent of their total terminal benefits were deducted as VAT remitted to the Zambia Revenue Authority by the Lukona Chambers, the lawyers that represented the retirees under VSAZ.
However, the retirees recently protested after learning that VAT is not applied on emoluments. They later sued the State in order to recover the money which it had released through Ms Mutti’s law firm.
But Ms Mutti told the Sunday Times that the VAT she charged the retirees was for the legal services that she provided to the retirees and the amount was remitted to ZRA.
She charged that she left her village to make money in Lusaka and it was therefore unthinkable for the retirees to suggest that she should offer free services.
“Listen, you don’t deduct VAT on terminal benefits, the VAT I was deducting was on the (legal) fees which I was charging which was remitted to ZRA,” she said.
“So what wrong have I committed? If I am complying with the law is that something wrong, why would people always want to live in lies?
Ms Mutti who could not confirm the K7.5 million figure said ZRA had cleared her of any wrong doing after the authority asked her to submit the documents on the matter.
She accused VSAZ general secretary Syachoke Simemeza of scandalising her, and warned that she would sue if people did not stop talking about her.
“Why is it that people that are not complying with the law are not scandalised but me who is complying, people are busy scandalising me, why?
“I am a lawyer with good standing, I have been a lawyer for many years and now if you malign my name like that and I lose my business, I will sue you,” she said.
ZRA was initially sued together with the State after the retirees accused the authority of collecting tax which it was not mandated.
However, the authority filed an affidavit in opposition stating that it could not be joined as defendants in the case because it did not receive the money.
The Authority further rejected a K620,000 cheque from Rabson Malipenga who is the retirees’ new lawyer who wanted to pay VAT, apparently in compliance with the old trend by the previous lawyers.
Times of Zambia