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ZRA pays KCM over K95m in tax refunds, to pay liquidator’s legal feesBy Stuart Lisulo on 11 Jul 2019
The Zambia Revenue Authority (ZRA) has paid Konkola Copper Mines close to K100 million in tax refunds, money which the mining company has allegedly used in part to settle legal fees for the appointed provisional liquidator.
And ZRA spokesperson Topsy Sikalinda has confirmed that the Commission will this month make two payments to KCM in Tax Refunds, but stressed that the payment would be an offset of the debt to ZRA, meaning it would not be paid in cash to the embattled mining company.
“This month, there is something that is earmarked to be paid to KCM in form of an offset because they are owing ZRA. So offset in this case means if they were owing K100 and they claim K20 we will pay and immediately get it back. We are not giving it to you physically but just debit and entry on the system. There is no actual cash which is going to KCM, because if you are owing we don’t pay you, we just do offsets,” Sikalinda said.
Asked if KCM made the claim for tax refund or ZRA was making the payment out of its own volition, Sikalinda confirmed that a claim was made, but refused to disclose the amounts to be paid.
“Unfortunately, I cannot give you the figures because that is a taxpayer identification aspect, but a claim was made and theyare actually two payments, but both of them are offsets. Remember we are a withholding agent, so if a payment is made, immediately the debt recovery guys will swallow the payment,” said Sikalinda.
But sources revealed to News Diggers that KCM made a tax refund claim and the Authority approved and went ahead to pay, a move which has raised eyebrows in some offices at Revenue House.
“The amount actually is between K95 million and K110 million. If this money went to operations at KCM or to pay workers and suppliers, this would have been acceptable, but we are reliably informed that most of this money was approved to pay legal fees for the liquidator of KCM. So it is true that it will not go to KCM, but it will be paid to the liquidators. Paying legal fees before the workers and suppliers raises eyebrows,” the source said.
“Secondly, how does a company that is in liquidation make a tax claim and you go ahead to pay when on the other hand you are claiming that KCM owes government over K3 billion in unpaid taxes. Why are you paying a company that owes you more than you owe it? Here, it appears some people thought they were going to find a lot of money in KCM coffers which they could share, but they found nothing.”
The source further explained that the procedure for processing Tax Refund was not followed.
The procedure for getting tax refunds is usually long, but this one was surprising because it was expedited. First you have to submit your VAT returns, if it is in a repayment position, to the indirect taxes department which is under Commissioner for Domestic Taxes, a Mr Moses Shuko. As per procedure, your claims are subject to a process of verifications. When did they do this? Then once the verification is done, your claim is submitted to the Treasury which is headed by Director Finance, a Mr Benjamin Simpungwe who reports to Commissioner Finance Mrs Brigitte Muyenga,” the source narrated.
“At the moment, there is a backlog of payments, hence claims are only settled when there is money available. However, if there is political pressure, Director in charge of Treasury can be compelled to pay. But this is happening when both the Director Treasury and Commissioner General (Kingley Chanda) are out of office.”
The source added that the government was moving at terrific speed to sell Konkola Copper Mines because the mine was incurring expenses without any production.
“So they will sell KCM to the Chinese even before the court process finishes because there is no money and no production going on at KCM and the Chinese are the ones who have shown that they have ready money to take it up in its current state,” said the source.
When contacted, KCM provisional liquidator Milingo Lungu said he was not aware of the Tax Refund payment from ZRA, saying he would have to ask the officers on the ground at KCM to verify.
“I am not aware of that, as far as I am aware KCM has not made any claim for Tax Refund, but it’s something that I can confirm and get back to you. Let me confirm with the people on the ground, but if it was done, I would have known, but I am not aware. But just to be cautious, let me get back to you,” said Milinga, further asking if the refund in question was on Pay As You Earn or VAT.
About Stuart Lisulo
Stuart Lisulo is an experienced journalist with a focus on business news.
Email: stuart [at] diggers [dot] news
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