Northern region critical to ZRA revenue growth
Published On April 14, 2021 » 688 Views» By Times Reporter » Business, Columns
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By Maimbolwa Mulikelela –

HOSTING one of the busiest and biggest export and import border points in the country, the Northern region will continue to be critical in revenue collection for the country.
Nakonde border post is tipped to be the biggest revenue contributor to the national treasury; hence the area deserving special attention in terms of infrastructure within and the surrounding districts.
It is encouraging that the Zambia Revenue Authority (ZRA) has continued looking at ways of consolidating its presence in the Northern region, particularly Muchinga Province.
The K10.9 million ZRA Provincial headquarters in Chinsali is earmarked to open doors to taxpayers within two weeks.
President Edgar Lungu will be invited to officially open the Provincial offices in Muchinga Province for the tax collectors by the end of May 2021.
A local contractor, Invest Corp was engaged to construct the offices, with the overall objective of the facility being to provide tax services to taxpayers to make it easy for them to plan.
ZRA Commissioner General Kingsley Chanda says after touring the building in Chinsali last week that the objective is to have provincial ZRA offices in each provincial headquarters.
A similar structure has been opened in Mongu while construction of another building in Choma will commence next year.
“Our mission is to look at our new offices here in Chinsali. This will be our Muchinga Provincial headquarters for Zambia Revenue Authority; we intend to establish our full complimentary service which is direct, indirect taxes and customs.
“Our overall objective is to provide tax services to our tax payers and so we are as close as possible for taxpayers to comply. We are very proud of ZRA establishing these offices in this province. We hope they will be motivated,” Mr Chanda says.
ZRA is also keen to work and encourage local contractors’ participation in public works.
“We want to encourage local contractors as much as possible. We want to be engaging local suppliers and contractors,” he adds.
ZRA director administration Callistus Kaoma explains that the cost of the building increased to K10.9 million because of material processing fluctuations due to Coronavirus (COVID-19), pandemic among other challenges. The initial total cost of the project was K8.7 million.
“There were some variations and additional works we initiated and also motivated by the expansion of the offices to include customs services which are direct and indirect taxes so the overall cost is K10.9 million,” he says.
Invest Corp project manager,  Moses Nachula says construction works were at 98 per cent completion.
“We have taken nine months on this project and I must say that we are at 98 per cent, the remaining two per cent is just for clean ups… we will be done within one week.
“COVID-19 affected the project especially with material. The project was supposed to be completed in December 2020 so we asked for this extension,” Mr Nachula further says.
Apart from touring the new Chinsali facilities, the ZRA delegation on an official tour of the Muchinga Province was informed how two trucks of goods were intercepted for false declaration of goods at Nakonde One Stop Border post.
ZRA Nakonde assistant commissioner Davies Mwanza says the Authority intercepted two trucks carrying goods in excess of K4.2 million in taxes at the border.
The first truck was carrying Konyagi, a white spirit produced from Tanzania valued at more than K1.2 million in taxes but falsely declared as steel doors.
Mr Mwanza says the taxpayer declared the consignment as steel doors with the payable amounts of less than K50, 000 when the actual taxes for the liquor was over K1.2 million.
As a result of this, the Zambian people would have been robbed in excess of K1.2 million in taxes.
“This truck was impounded two weeks ago,  the agent disappeared and the owners are known, now after we retrieved documents from Tanzanian side to establish who the true owners are, we are waiting for them to make a representation.
“The entire truck load was declared as steel doors with the payable amounts of less than K50, 000, the owners wanted to insist on the destination inspection but we got suspicious, we insisted that we open the container from here and it was actually discovered that it was Konyagi from Tanzania with the value of K920, 000 as value for duty purposes,” Mr Mwanza explains.
The ZRA delegation was further informed that the second truck was carrying electrical cables valued at K3 million in taxes.
Mr Mwanza further states that the Government could have lost revenue of close to K3 million if the consignment was not intercepted.
“The Clearing Agent declared the consignment as electrical cables valued at US$5, 000 but when we did our own investigation with the help of our colleagues from the Tanzania Revenue Authority we discovered that the documentation that they submitted in Zambia and what was sitting in Tanzania was different,” he says.
Recommendations have been made that the two trucks be seized and forfeited to the Government.
ZRA corporate communications manager Topsy Sikalinda says the Authority has made it clear that all smuggled goods will be seized and forfeited to the State in line with the law.
To curtail illicit trade, the ZRA signed a Memorandum of Understanding (MoU) with various Revenue Authorities in the region, stating that it was just right to declare the correct duties.
Further, on the pertinent issue of Value Added Tax (VAT) accrued claims, the ZRA chief reveals that K3 billion  was  paid as refunds for the first quarter of this year, with the largest portion going to the mining industry.
Mr Chanda says the Authority  is  committed to paying all VAT refunds, stating that on average every month ZRA pays claims amounting to K850 million.
“You may recall we had a lot of arrears that arose from the time we had issues with VAT Rule 18, which was later resolved and had to change the regulation to accommodate the challenges the taxpayers had,” he says.
ZRA will continue to refund on average K850 million every month but indicates that there are months where the refund claims are higher than what was budgeted for, paying about K1 billion.
“So far we have done just under K3 billion in refunds in the first quarter of 2021 and we are focused a lot on the mining industry because as you are aware they are the biggest claimants of refunds due to the nature of their business.
“I can safely confirm that just under K3 billion has so far been paid.
In fact the last payments we were making were for April 1, 2021 and we will continue with that programme,” Mr Chanda adds.
VAT claims are either paid in cash or by offsetting against the taxpayer’s current taxes.
“We do pay refunds in form of cash and we also for those that are willing, we do offset against their current taxes through a strategy.
We have managed to strategically reduce arrears but one thing I can confirm here is that as we dismantle arrears more refunds come in because that is the nature of the tax,” Mr Chanda further says.
Since its formation on April 1, 1994 as a corporate body, under the ZRA Act No. 23 of 1993, the Authority has continued playing a pivotal role in the country’s economy through collection of national revenue.
The Authority was created to redress the serious shortfall in revenues available to the Government and the increasing dependency on donor funding to support basic necessities.

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