Africa’s second largest red metal producer Zambia has shelved the sales tax proposal for 2020. This was pronounced in Dr. Bwalya Ng’andus debut budget presentation to parliament in the capital on 27 September.
Dr. Ng’andu in his speech said:
“Mr. Speaker, in the 2019 Budget Address, Government proposed to abolish Value Added Tax and replace it with Sales Tax. Following the pronouncement, a number of concerns were raised by various stakeholders, which included the cascading effect, negative impact on GDP growth and job losses through elimination of intermediaries in the supply chain. As a listening Government, we decided to carry out countrywide stakeholder consultations.”
“Based on the outcomes of the consultations, Government has decided to maintain the Value Added Tax, but address the compliance and administrative challenges.”
The former central banker however proposed to tighten administrative measures to strengthen enforcement and efficiency of the value added tax system to include:
i. Upgrade the Taxonline system for domestic taxes and interface it with customs system to ensure that all claims of refund for import VAT paid to Customs Services during import of goods are validated through systems based controls against data in the customs system;
ii. Make it mandatory to use Electronic Fiscal Devices (EFD) for VAT and other tax types and facilitate accreditation of additional EFD distributors and Virtual EFD software suppliers
iii. Make it mandatory to capture and electronically transmit to ZRA the Taxpayer Identification Number and Name of both
the buyer and seller of goods and services in all Business to Business and Business to Government transactions;
iv. Enhance Data Analytics and bulk data matching with third party institutions such as Patents and Company Registration Agency, Ministry of Lands and Natural Resources, NAPSA, ZESCO and the Zambia Public Procurement Authority;
v. Accelerate implementation of the Government Service Bus and Payment Gateway to ensure interface with ZRA; and
Augment and ensure timely audits of VAT claims, including outsourcing services of external forensic auditors whenever necessary.
The Kwacha Arbitrageur
