The Zambia Revenue Authority has written to Finance and Barclays Bank, ordering the financial institutions to freeze the accounts of Lamasat International Ltd over unpaid taxes amounting to K14 million.
According to a garnishee order signed by director for treasury Benjamin Simpungwe, ZRA wants the banks to remit any monies in the company accounts to the Revenue Authority.
“Notice under section 23 of the VAT Act (Cap 331), section 171 of the Customs and Excise Act (Cap 322) and section 84 of the Income Tax Act (Cap 323) In respect of Tax arrears owed by: Lamasat International limited. Take notice that the taxpayer stated above is indebted to the Zambia Revenue Authority to the extent indicated K14,081,602.46,” Simpungwe stated.
“You are therefore, served with this notice requiring you to block all debit and transactions and immediately remit to Zambia Revenue Authority the balance from the accounts of: Lamasat International limited held with your bank.
Transfer is to be made to the accounts as per attached RTGS and PRN. When the funds have been transferred, kindly notify the company directors, director Treasury – Zambia Revenue Authority and assistant director ZRA Debt recovery Unit.”
ZRA further warned of consequences if the banks did not comply with the garnish order.
“The Zambia Revenue Authority shall notify you when this matter is cancelled, as soon as the Tax has been discharged. Your attention is drawn to the attached extracts from the VAT Act, Income Tax Act and Customs and Excise Act, which outline the powers invoked above and sets out the consequences of none compliance with this notice,” stated Simpungwe.
In January this year, the Lusaka High Court intervened when Finance Bank Zambia moved to recover its US$13 million loan debt from Lamasat International Ltd.
Lamasat had sued Finance Bank, seeking an order to vary or restructure the settlement terms of the loan facility dated April 13, 2016 to a monthly installment of US$75,000 over 60 months.
The company complained that on January 26, it received a letter from Finance Bank demanding settlement of US$12,229,065.63 on its term loan facility and arrears of overdrawn account facility within 14 days and that failure to make the payment would prompt them to appoint a receiver/manager to recover the debt.
Lamasat added that it was in the process of selling some of its properties to improve its cash-flows, which would assist in honouring its obligations to the bank.
Lamasat International Ltd is a manufacturing company of pipes and polypropylene bags. It was registered in 2002 and boasts of employing about 900 employees.
According to the Lamasat website, however, the company “has grown with investments of over US$ 60 million with a diverse range of products and services, with annual turnover having crossed the US$ 40 million mark in 2012” and “enjoys support from the Zambian government” under an Investment Promotion and Protection Agreement.