VAT hitches causing cash flow crisis - ZiCA

BOTTLENECKS around the Value Added Tax ( VAT) should be resolved and clarified in the 2023 na tional budget as they are creating a cash flow crisis, especially for small busi ness suppliers.

This is according to the submission made by the Zambia Institute of Char tered Accountants (ZiCA) to the Ministry of Finance and National Planning for consideration.

ZiCA emphasised that the VAT system was a night mare, especially for small businesses which supplied materials to the mining companies.

“We need to resolve VAT, it is just a nightmare for suppliers and there are a lot of challenges around that. In many instances the tax payer withholding does not pay the Zambia Revenue Authority (ZRA). We feel that there is need to clarify the legislation and make sure it is not a burden.

“You have a situation where you as a taxpayer has paid VAT to ZRA but they cannot get the credit because the withholding agent has not paid so all those are inconveniencing especially small businesses supplying to the mines and creating a cash flow crisis,” ZiCA stated.

On the widening of the tax bas es, ZiCA called on Government to ensure that measures which were put in the 2022 national budget such as mandatory use of electronic fiscal devices should be implemented.

ZiCA observed that the policy around this measure had been slow including the roll out.

It attributed the devel opment to partly legisla tion and administrative while emphasising that this measure was key to widen ing the tax base

“We are aware that there were some measures which were undertaken in the last year’s budget and the previ ous one but they have not really been implemented properly.