‘VAT used to loot Zambia’

THE value added tax (VAT) has not served the purpose for which it was introduced but has been used to loot Government of its resources, the Economics Association of Zambia (EAZ) has said.

EAZ president Lubinda Haabazoka said in Lusaka yesterday instead of building the economy unscrupulous people and corporates exploited leakages in the administration of VAT to rob the government of revenue.

Dr Haabazoka was responding to Vice President Inonge Wina who appealed to EAZ to provide accurate information about Zambia’s economy in the wake of a misinformation from some questionable sources.

“When we look at the issue of VAT versus statistics it is clear that with the privatisation of mining and introduction of VAT in 1995 VAT did not serve its purpose,” he said.

“Instead of building industry it was used to loot the State of its resources,” Dr Haabazoka said. He was worried that under the VAT system the Zambia Revenue Authority (ZRA) had been refunding more than the revenue it had been collecting as a result of the leakages.

Dr Haabazoka attributed the misinformation to people with political ambitions which he said created a wrong picture about the country.

Mrs Wina urged EAZ to be proactive in educating Zambians on economic issues so that they were not misled by misinformation.

She said Zambia had a knowledge gap in financial issues causing people to be easily swayed by misinformation from sources who were not credible. Ms Wina said EAZ being an influential association that people listened to should help in educating the people.

Speaking when a team of EAZ officials paid a courtesy call on her at her office, she said the institution should organise informed discussions in various sectors of the economy.

Ms Wina said EAZ should ensure people understood the difference between sales tax and VAT which was being phased out.

She said EAZ could be helpful in analysing economic issues, scrutinising, advising and critiquing several government policies from which it could make changes.

Dr Haabazoka said the EAZ board had resolved to provide sound and objective advice to various economic players, including the government.

He said the EAZ had shown leadership by clarifying sales tax and alleged sale of ZAFFICO. He said the forthcoming national economic summit set for July 25 in Livingstone had received sponsorship from about 15 companies.

Kenyan President Uhuru Kenyatta and some former presidents have been invited.