ZRA ponders effective VAT implementation measures

THE decision to maintain the Value Added Tax (VAT) will be treated with renewed energy and initiatives based on smart technology to enhance revenue collection, Zambia Revenue Authority (ZRA) commissioner-general Kingsley Chanda has said.

Mr. Chanda yesterday said to ensure the effective implementation of VAT, the ZRA would address the compliance and administrative challenges especially the falsified refund claims, double claims and transfer pricing through over invoicing.

Mr. Chanda said as the body responsible for administering tax policy on behalf of Government, the ZRA recognises the need to support all government policies for the betterment of the country and its citizens’ political, socio-economic well-being.

He said ZRA would be upgrading the tax online system for domestic taxes and interface it with customs systems to ensure that all claims of refund for import VAT paid to Customs Services during importation of goods are validated through systems based controls against data in the customs system.

Mr. Chanda said the ZRA would also put in place measures to ensure the mandatory use of Electronic Fiscal Devices (EFD) for VAT and other tax types and facilitate accreditation of additional EFD distributors and Virtual EFD software suppliers and vendors.

He added that making it mandatory to capture and electronically transmit to ZRA the Taxpayer Identification Number and the names of both the buyer and seller of goods and services in all Business to Business; and Business to Government transactions had already been implemented across businesses that include chain stores and other VAT registered suppliers.

“To that effect, two new units have already been set up to enhance data analytics and bulk data matching with third party institutions and to enhance enforcement and compliance activities.

“Other measures put in place include the implementation of stiffer penalties for tax evasion including prosecution and timely audits of VAT claims, including outsourcing services of external forensic auditors whenever necessary,” Mr. Chanda said.

He said the authority believes that the comprehensive review of the tax system which the Government intends to undertake as pronounced in the 2020 Budget would promote investment and broaden the tax base through increased economic activities.

He assured Government and the general public that the authority would continue to take action that enable Zambia’s tax regime to be transparent, professionally managed and sustainable in line with the authority’s mission statement.