Economy

STATE, MINES IN TAX DEBT SWAP

By BUUMBA CHIMBULU
SOME mining companies are undertaking tax offsets with Government, says Zambia Chamber of Mines (ZCM).
Under the debt swap arrangement, some of the taxes the mining firms owe Government will be offset with the outstanding Value Added Tax (VAT) refunds owed to the sector.

According to statistics from the Zambia Revenue Authority (ZRA), the mining companies owe tax revenue in excess of K19.68 billion while the Government has outstanding VAT refunds due to the mining companies amounting to K10.4 billion.
Tax offsets have therefore been initiated as a way of solving the matter.
ZCM Chief Executive Officer, Sokwani Chilembo, said in an interview that the tax offsets were currently happening at company level.
“It happens, it has been happening for a long time. So it is an on-going process, it is part of the whole process. So it is on-going. They happen at company level.
“I will need to make contacts, we do not comment on it without making direct contact with the members. We need to speak to them then give you some information. So let me find out from them,” Mr Chilembo said.
Recently, ZCM president, Goodwell Mateyo, indicated that the Chamber was in discussion with Government for a possible debt swap.
Mr Mateyo said once the discussion was fruitful, Government would not have to pay cash from the treasury but allow entities owed refunds to make off sets against taxes that they owe.
“One of the things which is quite important is on cash working capital and one way they [Government] could assist is through the outstanding VAT.
“Not necessarily paying cash, but at a very least allow mines to make offsets against some taxes that they owe ZRA if those could be clawed out of the VAT refunds. This is an on-going discussion but we wish it could be resolves quicker,” Mr Mateyo said.

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