Chipimo backs Chikwanda over VAT refunds

IT is unfair for anyone to condemn Finance Minister Alexander Chikwanda for advocating VAT refunds to mining companies amounting to US$600 million, National Restoration Party (NAREP) president Elias Chipimo has said.

Mr Chipimo said Mr Chikwanda had tried to do the “honourable thing” by acknowledging the truth.

“If any former minister is claiming that the current finance minister has been benefiting from the mining companies and wants to return the favour by paying them their VAT refund, perhaps they can share with us how they benefited when they did the same thing while serving in that capacity,” he said.

Mr Chipimo told a media briefing at his secretariat yesterday that it was surprising to see Mr Chikwanda being criticised in the media by some of his predecessors for advocating VAT refund to mining companies.

Mr Chipimo cited Edith Nawakwi, Peter Magande and Situmbeko Musokotwane as former finance ministers who did the same as what Mr Chikwanda was doing.

“The real issue with VAT rule 18 is that the government has run out of money and has used funds required to repay exporters.

“They now need to find a reason to delay those payments and to put the blame on someone else,” he said.

Mr Chipimo said the delays were most likely contributing to the poor performance of the economy by dampening investor confidence and depriving ordinary Zambians of their pay and employment.

“ZRA has not previously demanded full compliance with VAT rule 18 in so far as import documentation is concerned  because they are fully aware that there is no globally established practice of customs agencies providing confirmation of importation of goods into their countries,” he said.Mr Chipimo said ZRA also new when copper had been exported and would be the first to know if any of it was re-imported.

“The solution lies in changing the law, not in condemning Mr Chikwanda for doing what all his predecessors have done for the last 17 years,” he said.

Mr Chipimo however cautioned that the law to remove zero-rating of exports would contradict the basis on which VAT was charged.