VAT change requires proof
Published On February 24, 2015 » 2194 Views» By Administrator Times » Business, Stories
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By JAMES KUNDA –

THE Chamber of Mines of Zambia (CMZ) says government’s move to amend the Value Added Tax (VAT) rule number 18 provision requires proof of arrival before VAT can be refunded is a positive step.
Rule 18 (1) required proof of arrival of the exported commodities in the receiving country before any VAT refund can be effected and some exporters were unable to comply with it due to challenges in doing so.
CMZ president Jackson Sikamo said the move by the government, through the Zambia Revenue Authority (ZRA), to change the rule was progressive.
Currently, the government owes local mining houses more than US$600 million in outstanding VAT refunds as the result of the mines’ failure to comply with the rule.
Mr Sikamo said the resumption of VAT refunds payment to mining companies would increase the potential of investing in expansion projects that would boost production.
Mr Sikamo said in an interview yesterday that the move by the ZRA reignited investor confidence with the potential to expand mining projects in Zambia.
ZRA Commissioner General Berlin Msiska last Friday issued a Gazette Notice to effect amendments to Rule 18 of the VAT Act providing for conditions of zero-rating of exports that usually placed mining companies in a weak VAT refund position.
The Statutory Instrument (SI) was signed on Thursday, February 19, 2015 and published in the Government Gazette on the following day.
“This is a step in the right direction and we are in continuous dialogue with Government and other stakeholders to ensure that the mining industry offers sustainable win-win solutions for everyone,” he said.
Mr Sikamo said the chamber was confident that the backlog of the VAT refunds would be cleared within the stated period of time.
“With the levels of dialogue currently going on, we are optimistic that the backlog of the VAT refunds will be cleared within the stated timeframe and as and when the recipients claim,” he said.
The new measure took effect on Monday this week.

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