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VAT RULE 18 PROVING CHALLENGING TO IMPLEMENT

Gazette Notice No. 27 of January 2013 introduced the Value Added Tax (General) (Amendment) Rules, 2013, which amended Rule 18 of the Principle Rules of Value Added Tax (General) Rules, 1997. This was done as a means of enforcing Statutory Instrument No. 55 of2013 (The Monitoring of Balance of Payments Regulations).

Following the revocation of SI 33 and 55 last month and various complaints by ZAM members and other industry associations on the implementation of VAT Rule 18, ZAM through the Customs to Business Forum engaged Zambia Revenue Authority (ZRA) highlighting the challenges the business community has faced as regards the implementation of in particular, Rule 18 2(1)(b) which requires that exporters produce to an authorized officer “copies of import documents for the goods, bearing a certificate of importation into the country of destination provided by the customs authority of that country.”

During a meeting held with the Commissioner General of ZRA, ZAM alongside representatives of the business community discussed and sought to find a way to address the implications of VAT Rule 18 on the private sector, which has resulted in serious implications on working capital and cash flow, and large sums of unremitted VAT refunds.

Following this initial meeting, ZAM will be engaging the Ministry of Finances to ensure this matter is resolved speedily and enable businesses operate more efficiently.

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