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Extension of ZRA tax amnesty good gesture

Dear editor,
ZAMBIA Revenue Authority (ZRA) introduced the tax amnesty on April 24, 2017 to enable the entrepreneurs clear the principal amounts owing on

various forms of taxes. These include turnover tax (TOT), value added tax (VAT), pay as you earn (PAYE) to mention but a few.
The tax amnesty ran from April 24, 2017 to July 31, 2017. The amnesty was designed to benefit the taxpayers in such a way that upon finishing paying the whole principal amount owing, then the taxpayer qualifies for waiver of penalties and interest. Tax waiver means that the penalties and interest are written off.
The tax amnesty has benefited the Government in that more revenue approximately K400 million has been raised since the exercise commenced in April this year. It has also provided the taxpayers a flexible way of settling the outstanding tax obligations.
However, taxpayers accumulated huge debts arising from failure to comply with tax obligations due to various reasons. These include lack of making profit by some entrepreneurs, some businesses incurring huge overhead costs, low production exacerbated by excessive load shedding experienced between 2015 and 2016 among other factors.
Some taxpayers failed to comply by paying tax returns late and others not paying at all. For whatever reasons taxpayers failed to meet the tax obligation, the amnesty came at the right time.
By the deadline of the tax amnesty which was on Monday July 31, 2017, there were still many people who had not yet applied for amnesty due to high turnout from the time the amnesty was launched.
This prompted the Government to extend the amnesty to August 31, 2017. This measure is aimed at enabling many taxpayers apply for amnesty so that many entrepreneurs can clean their books with ZRA and start on a fresh note come January 2018.
The extension of the tax amnesty is indeed a good gesture, but the Government can do more by reducing the high interest and penalties imposed on defaulting taxpayers. This is because business is very competitive in Zambia.