Chamber of Mines Bemoans $600m Vat Non-Refund

THE Chamber of Mines (CMZ) has said the US$600 million Value Added Tax (VAT) non-refund has impacted negatively on mining companies as it has resulted either in incomplete inability or delayed payments to suppliers and contractors.

CMZ communications manager Talent Ng’andwe said on February 4 this year, CMZ submitted on the effects of withholding the VAT refund by Zambia Revenue Authority (ZRA) on metal exports from August 2013 to date which has impacted both on the mining companies and the ancillary industries.

Mr Ng’andwe said in a statement that the severe liquidity crisis faced by the companies has resulted either in incomplete inability or delayed payments to suppliers and contractors.

He said operators were having difficulties in funding employees’ salaries while local suppliers were unable to procure their imports.

“It is in correct to characterise the issue of VAT refunds as an issue for the mines alone. ZRA has been withholding refunds for all exporters as evidenced by a letter from the Chamber of Commerce and Industry (ZACCI) to the Minister of Finance. This issue therefore concerns the entire economy,” he said.

Mr Ng’andwe said the CMZ finance committee has in the past held meetings with ZRA to discuss the outstanding VAT refunds as provided in the law and that the backlog had accumulated to over US$600 million to date.

He said the meeting was further called to discuss the provisions of the VAT rules of 1997 rule number 18(1) which has been in effect since 1997 but has never been fully enforced due to impracticalities of doing so.

Meanwhile, the Zambia Revenue Authority (ZRA) has said it is still analysing various submissions from stakeholders on the VAT general rule number 18.

ZRA corporate Affairs manager Mumbuna Kufekisa said the authority had received submissions and representation from various private and public stakeholders with regards to the administration of VAT Rule 18.

“ZRA is considerate of stakeholder concerns in the administration of taxes. Accordingly, ZRA is analysing these various submissions from the stakeholders,” Mr Kufekisa said in a statement.

He said the core mandate for the authority was to collect revenue on behalf of the Government within the framework of the prevailing legislation.

Mr Kufekisa said in undertaking its mandate, the ZRA aspires to among others carry out its work with political impartiality.

MMD national treasurer Mwansa Mbulakulima has also added his voice to the on-going debate on whether Government should pay the US$ 600 million VAT refunds owed to mining companies.

Mr Mbulakulima said the VAT refunds owed to the mines was a business transaction which Government must honour at all costs and that it should not be blamed on Finance Minister Alexander Chikwanda as an individual.

“Even if a different person was occupying the office of Finance minister other than Hon Chikwanda, this is a business transaction that Government has an obligation to honour,” Mr Mbulakulima said in an interview.

He said the repayment was supposed to be undertaken collectively by Government and wondered why Mr Chikwanda has come under heavy criticism for decision he was taking on behalf of Government.

Source : The Times of Zambia

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