GOVERNMENT has declassified a secret letter written to President Michael Sata over the administration of the Value Added Tax (VAT) General Administration Rule 18 that was deliberately leaked to a selected media house which is now being used to scandalize and blackmail Finance Minister Alexander Chikwanda who has since demanded that the law enforcement agencies must immediately establish how the document got into the possession of unauthorized persons.
And Mr Chikwanda has warned the cartel plotting to take over the presidency of the Patriotic Front (PF) and that of the country before President Sata completes his first term that they would be severely injured because the Head of State was aware of their clandestine schemes.
Speaking at a media briefing at his office yesterday, Mr Chikwanda said Zambians must refuse to be unduly used and influenced by a segment of the population who was compromised for what he termed small stakes or stipends.
Mr Chikwanda said he had sought the indulgence of President Sata to make the classified letter public in which he had asked for guidance on VAT Tax General Administration Rule 18 following a sustained campaign to malign him after some media houses using some hired individuals deliberately distorted the contents of the letter to create base for their assault.
“I have sought the indulgence of the President to make public a letter addressed to him on 15th July, 2014, in which I asked for his guidance on VAT Tax General Administration Rule 18. The letter was a classified document, therefore, the law enforcement agencies, whose duty it is to protect government confidentiality and integrity, may wish to establish how it got into the possession of unauthorized persons. Zambians must refuse to be unduly influenced by segments of our population who are compromised, in some instances for small stakes or stipends,” Mr Chikwanda said.
Mr Chikwanda has reiterated that VAT Rule 18 affected all exporters and not only those in the mining sector adding that mining companies were not being insulated from their tax obligations.
In the letter to President Sata, Mr Chikwanda explained that under Rule 18 of the VAT General Administration, the requirement to obtain information from importers outside Zambia’s jurisdiction had proved impractical and had resulted in delayed processing of VAT refunds.
Giving the mines as an example, Mr Chikwanda told President Sata that there had been undeclared backlog in VAT refunds in excess of $600 million and that since the country’s fiscal space was severely constrained, government could only clear the backlog by negotiating staggered repayments with mining companies.
Mr Chikwanda stated that the VAT General Administration Rule 18 was creating uncertainty and undermined confidence in the economy hence the need to ask the Zambia Revenue Authority (ZRA)to streamline Rule 18 so that it could be limited to regulation and verification of exports as well as bank certification of receipt of export proceeds.
Mr Chikwanda said those who have been slandering him and calling for his resignation should understand that while he had shares in Sigma Enterprises, at no time did he have any influence in its business with the mines in Zambia because he was not part of the management of the company.
He said Sigma Enterprises was a United Kingdom (UK) registered company that has been doing business in Zambia for the last 28 years and that what the company was supplying to the mines in Zambia was little as compared to other countries such as Chile and Australia.
He said undermining individuals and leaders entrusted with serious responsibilities in the governance of the country could only suit the expedience of some political players but cautioned that such vile schemes were not good for the country.
Mr Chikwanda said while some media houses were free to embrace crusades and promote the political interests of some persons whose ideologies such media organisations subscribed to, their actions should never be shrouded in malice. And Mr Chikwanda has said Mr Sata and the Presidency were safe from getting hijacked by the clique currently scheming to take over the leadership of the country and warned that the clique was courting political disaster because they would soon be severely injured.
Mr Chikwanda said the sentiments of peace and unity by the majority of Zambians would never be rattled by individuals planning to create acrimony in the country by attacking innocent citizens perceived as their obstacle to meeting their ambitions.
“As a country, we must be seen to be united because any disunity can adversely affect the fortunes of the country and those wanting to crudely take over from President Sata will be injured. President Sata is very safe and it is those scheming against him who risk being injured,” Mr Chikwanda said.