Point Of View: Understanding Taxes And Their Impact On Business Relations With The Collector

 By Thom Shonga


Pay As You Earn (PAYE) and Value-added tax (VAT) are not part of business operations.

When a company collects (‘charges’) VAT on its goods or services, the VAT charged is not money charged to finance business operations, it is a tax (revenue) that a company is collecting on behalf of government.

This means that a company cannot default on VAT when remitting to the tax authorities that it has already collected unless the company illegally uses the government money (Tax) for its operations.

Secondly, when PAYE is collected from employees by employers this is done so on behalf of government. And, like VAT, it is not supposed to be used by the company for its own business operations.

In the case of The Post Newspaper, whilst it was sued by the Zambia Revenue Authority (ZRA) for defaulting in remittance, it should have been equally charged for illegally using PAYE and VAT. Non Tax compliance is a criminal offence in certain societies and offenders are in some cases banished from holding key positions or owning businesses.

Taxes are a very vital element in the running of government, to provide various services for its people, and as such, businesses need to comply and those that are meant to oversee the use of our taxes are expected to account for every tax collected and not used them for their own personal benefit without Parliamentary approval.

There are no sacred cows when it comes to taxes, whether one has contributed to the advancement of our democracy or not.

It’s like saying former President Chiluba shouldn’t have been pursued for his alleged corrupt ways because he was one of those that ushered in our democracy.

Whilst, people sympathise with The Post, let us not condone criminality. If The Post is closed for its non compliance, another player can come in to fill in the void. We are a liberal society.

*The author is a UK based professional working with a Chartered Accounting Firm

Categorized | Home News

One Response to “Point Of View: Understanding Taxes And Their Impact On Business Relations With The Collector”

  1. Saili Mwanza says:

    It is amazing how some sections of society,especially opposition leaders could side with criminality.The Post collects VAT on behalf of the government but does not want to remit it to the treasury!What is special about the post? I question its auditors,finance managers who cannot question tax evasion and calls it harassment when reminded by ZRA to remit what it collects on behalf of Zambia people.Shame on Membe


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