ZRA fails to collect K24bn in taxes, reveals Auditor-General report

 

THE Zambia Revenue Authority (ZRA) has come under fierce attack for failing to collect domestic taxes which swelled to over K24 billion by the end of 2015. The Authority has further been strongly criticised for failing to seize assets from taxpayers after expiry of warrant of distress like the case was for the Post Newspaper. The scathing attacks are contained in the latest Auditor-General’s report for the financial year ended 31 December, 2015 which has revealed that ZRA failed to collect tax arrears which had increased by K18,013,748,643 from K6,417,054,273 in 2014  to K24,430,802,916 in 2015, representing an increase of 280 percent. The report noted that the failure to collect taxes by ZRA could not be understood because the Income Tax Act provided for tax-payers to settle tax due by instalments through the Time To Pay Agreements (TPAs) between the Authority and tax-payers. In addition, ZRA guidelines required that any outstanding domestic tax liabilities should be recovered in full using recovery instruments such as warrant of distress, garnishee of appointment of agent, charge on land and recovery through courts in any order. On the failure to seize assets of defaulting taxpayers, the report pointed out that according to ZRA debt collection procedure manual, the Authority has various instruments at its disposal for debt collection. “ZRA may issue a demand

notice to any tax payer for an outstanding debt. When debt is not cleared within 10 days, a warrant of distress is supposed to be issued which has an expiry date of 10 days. “If a tax payer does not clear an outstanding debt within the stipulated time, ZRA should seize assets of the tax payer and recover the taxes due through auctioning,” the report says. The Auditor-General’s report further states that during the period under review 555 companies managed to reduce their arrears by K202,957,771 in 2014 but a scrutiny of payments received in 2015 revealed only K122,693213 was supported by evidence of payments while the balance of K80,264,558 remained unsupported. ZRA has also failed to collect K200, 205 on 123 in mineral royalty tax from January to November 2015 without any explanation. On ZRA’s failure to collect duties on transit, the report stated that an examination of records guaranteed amounts of goods totalling K26, 769, 644 that entered Zambia from January to December 2015 had not exited the country and that as of September, 2016 the Authority had not called on the bonds despite the lapse of allowable period.

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