THE Mine Workers Union of Zambia (MUZ) has demanded that the Zambia Revenue Authority (ZRA) must refund the Value Added Tax (VAT) it owes the mines to enable them to reinvest and also conduct their community social responsibility.
MUZ president Nkole Chishimba said mining companies should be refunded the VAT because the money belonged to them.
Mr Chishimba said mining companies deserved to be refunded the VAT because it was the money which they paid when exporting copper.
He told the Daily Nation yesterday that members of the public and other stakeholders should understand that the tax refund was not a favour to mining companies, but it was money which genuinely belonged to them.
“The VAT refund is not a favour being given to mining companies, but it belongs to them. This is the money which the pay when exporting copper, so this money should be refunded,” he said.
And Copperbelt Show Society chairman Bill Osborn has also backed the VAT refund to the mines saying it was supported by the law.
Mr Osborn said mining firms should be given the tax refund because it was within the law, but the only stumbling block was the issue of certification.
“When the other side receive the goods, they are not in a hurry to prepare the certification documents,” he said.
Mr Osborn also said mining companies should be refunded because it was in the spirit of the law, but added that the challenge was in the details.
The ZRA is withholding over US$600 million VAT refunds and have said they would only release the money when the affected mines produce receipts from the importing companies.
The chamber of Mines of Zambia has however said the requirement of importation receipts was cumbersome and impracticable.
The chamber has since urged Government to ensure that VAT refunds were made to all exporters so that they could continue to progress in increasing mining and manufacturing production to sustain and continue to create jobs.
The chamber said that the non-payment of the withheld VAT refunds have had and continue to have a major adverse impact on the operations of the mining companies.
The Chamber of Mines has appealed to the government to urgently resolve issues surrounding VAT Rule 18.
“The cash flows have been seriously constrained following the withholding of the refunds, resulting in many mining companies suspending, deferring and cancelling capital projects among other undesirable actions to keep operations going.
“The effects of these actions are already being felt in the medium to long term. There will be a negative impact on mine production, production costs and suppliers of goods and services to the mining industry,” the chamber said.
The chamber said the mining industry needed to be nurtured for it to continue to generate revenues required to diversify the economy.
It stressed that the mining industry in Zambia would continue to be the engine of the economy for a long time to come hence the need for the relevant authorities to ensure it was safeguarded. Government through the Zambia Revenue Authority (ZRA) amended Rule 18 of the Value Added Tax (VAT) General Rules of 1997 to safeguard government revenue with effect from September 8, 2014.