Busi­nesses told to adapt pend­ing pric­ing rules

Daily Nation Newspaper - - NORTH-WEST NEWS -

By MAILESI BANDA GOVERN­MENT has in­tro­duced tight mea­sures to pro­tect Zam­bia from los­ing rev­enue through trans­fer pric­ing be­ing prac­ticed by un­scrupu­lous com­pa­nies es­pe­cially in the min­ing sec­tor.

And the Zambian busi­ness com­mu­nity has been ad­vised to adapt to new trans­fer pric­ing reg­u­la­tions ex­pected to be ef­fected by De­cem­ber 31, aimed at sav­ing the coun­try bil­lions of kwacha.

Be­fore the en­act­ment of this law Zam­bia has been los­ing bil­lions of kwacha due to prices of goods be­ing reg­u­lated from other coun­tries.

The busi­ness sec­tor has been ad­vised to pre­pare for en­hanced com­pli­ance re­quire­ments and dis­clo­sures around party trans­ac­tion, es­pe­cially since the new law could be en­acted be­fore the end of the year.

Ac­cord­ing to Deloitte and Touche, tax di­rec­tor, Vic­tor Muhundika, it is im­por­tant for the busi­ness sec­tor to em­brace the chang­ing land­scape on trans­fer pric­ing reg­u­la­tion in Zam­bia to up­hold busi­ness in­tegrity.

Mr. Muhundika was speak­ing dur­ing a work­shop on Zam­bia trans­fer pric­ing reg­u­la­tions in Lusaka yes­ter­day

“Trans­fer pric­ing rules are Anti-Tax avoid­ance rules which are pri­mar­ily aimed at pre­vent­ing multi­na­tional groups from shift­ing prof­its from one ju­ris­dic­tion to an­other, usu­ally a low tax ju­ris­dic­tion,” Mr. Muhundika ex­plained.

He said the trans­fer pric­ing rules in Zam­bia were plac­ing an obli­ga­tion on tax­pay­ers to keep and main­tain doc­u­men­ta­tion that con­firm com­pli­ance with the stan­dard on busi­ness trans­ac­tions with re­lated par­ties.

And Deloitte and Touche, Cen­tral African as­so­ci­ate tax di­rec­tor, Cabrini McCar­rick said trans­fer pric­ing should be taken se­ri­ously by the busi­ness com­mu­nity as it could af­fect the rep­u­ta­tion of a busi­ness.

She said trans­fer pric­ing was part of cor­po­rate busi­ness adding that any­thing neg­a­tive in re­la­tion to trans­fer pric­ing would dent the busi­ness.

The Govern­ment ear­lier this year made a de­ci­sion to is­sue a draft amend­ment to the pric­ing reg­u­la­tions. The draft statu­tory in­stru­ment pro­poses to make trans­fer pric­ing doc­u­men­ta­tion com­pul­sory for all tax pay­ers who have re­lated party trans­ac­tions and whose an­nual turnover ex­ceeds K20 mil­lion.

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