ZRA needs k800 million to refund vat every month

The Zambia Revenue Authority (ZRA) has disclosed that Zambia needs not less than 800 million kwacha to refund Value Added Tax every month.

ZRA Commissioner Kingsley Chanda says these refunds are largely going to the mining industry.

Speaking at a Zambia Institute for Policy Analysis and Research (ZIPAR) analysis of the 2019 National Budget, Mr. Chanda explains that the VAT system became negative because government started refunding more than it was collecting.

Mr. Chanda says it is for this reason that government is introducing Sales Tax to replace VAT.

He has also explained that Zambia will be among the 46 other countries who will be using the Sales Tax as opposed to VAT.

Mr. Chanda says the Authority has 6 months in which to engage stakeholders before implementation of sales tax stressing that the tax will be designed in a manner that does not negatively affect the production sector.

Speaking at the same meeting Zambia Institute for Policy Analysis and Research (ZIPAR) Research Fellow Shebo Nalishebo urged government to indefinitely postpone the contraction of all pipeline debt until the debt is brought back to moderate risk of debt distress.

Mr Nalishebo says this is likely to address the reported disagreement with the International Monetary Fund (IMF) with regard to access to a credit facility.

He says there is further need for the government to cancel some of the current contracted loans that are yet to be disbursed to reduce the debt service outlays.

Mr. Nalishebo says there is also need to cease the issuance of letters of credit and guarantees to state owned enterprises that are technically insolvent until their balance sheet challenges are resolved.

And in her opening remarks, ZIPAR Executive Director Pamela Kabaso says there is need for government to take a different approach in order to deliver on fiscal consolidation.

Dr. Kabaso says the paths that the government has taken in the past years have not delivered the desired fiscal outcome.