ZRA gets tough with mines

ZAMBIA Revenue Authority says it has made a K76.5 billion (USD7.7 billion) assessment issued to a prominent mining company for misclassifying consumables and spare parts at importation for the last five years.

Zambia Revenue Authority (ZRA) Corporate Communications manager Topsy Sikalinda stated in a statement today that the authority was taking the case seriously and urged officers to pursue all available options to the authority to recover all taxes on behalf of Zambians.

“The Zambia Revenue (ZRA) has started the process of comprehensively auditing mining companies in all applicable tax types. Last year, the amnesty on interest and penalties was announced to allow taxpayers to clean up their tax accounts. Those with issues were expected to engage ZRA and have a waiver on interest and penalties. A post amnesty review shows that only small and medium companies stepped forward and the authority raised about 4.4 billion kwacha from the programme. Unfortunately, most large companies did not participate despite numerous reminders and extensions,” Sikalinda stated.

“For this reason, we are announcing the preliminary assessment of K76.5 billion (USD7.7 billion) issued to a prominent mining company for misclassifying consumables and spare parts at importation for the last five years. The said items were declared as mining machinery (which attract customs duty at zero per cent) when in fact not. The applicable duty rate for the items ranges from 15 to 25 per cent.”

Sikalinda assured the public that the amnesty programme was not a joke and that the authority’s promise to deal with non-compliance was real.

“In line with this objective, the 2018 theme for ZRA is ‘Rewarding compliant taxpayers and punishing non-compliant taxpayers to the maximum’. The Authority has therefore started detailed audits on all mining companies for compliance in all applicable tax types in order to ensure all taxes due are collected. The planned audits will cover the statutory period of six years to start with. However, if the findings will reveal a pattern of consistent, systematic, premeditated cheating (tax evasion), we shall criminalise the acts and cover longer periods to achieve the intended objective,” Sikalinda stated. “The authority is currently ascertaining the involvement of the clearing agent, who, if found to have been actively involved, will face appropriate sanctions that may include complete revocation of the trading licence. We have since notified both the mining and the clearing agent of this unacceptable act of cheating.”

Sikalinda stated that starting March 26, 2018, ZRA investigation teams and auditors would commence the audit of all mining firms in Zambia.

He appealed to all other companies and players in the mining sector that might have been involved in illicit tax activities to make self-disclosure before the authority discovered them.

“This will help them minimise their exposure to penalties and interests. To those that are evading tax or contemplating doing dubious activities, our warning to them is to stop immediately and start complying. The authority will definitely catch up with them and take all measures to collect taxes, penalties and interest due,” stated Sikalinda

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