ZAMBIA Revenue Authority (ZRA) is owed over K36 billion in taxes by contractors, government agencies and some companies which closed, especially during the privatisation period. And Secretary to the Treasury Fredson Yamba says Government will do all it can to settle debt owed to contractors and other companies to enable them to pay taxes to ZRA. ZRA commissioner-general Kingsley Chanda said the authority has had challenges collecting K36,166,800,000 tax debt because some businesses have closed without fulfilling their tax obligations, while some companies’ proprietors have died. Mr Chanda was responding to a question from Muchinga Member of Parliament (MP) Howard Kunda, who wanted to know why ZRA has taken long to collect taxes from some firms.

This was when he and Secretary to the Treasury Fredson Yamba appeared before the Public Accounts Committee chaired by Mr Kunda. “There are various reasons which make tax debt uncollectable. Over a period of time, some companies close, like those that closed during privatisation. Some businesses are owned by one individual whom, after death, the company closes.

“The bulk of the debt relates to government transactions. If Road Development Agency has not paid contractors, how will I collect Value Added Tax? If KCM (Konkola Copper Mines) has not paid its contractors, how will I collect taxes?” he asked. Mr Chanda said after verification processes, ZRA will write off debt owed by companies that have closed without settling so that it does not appear in the AuditorGeneral’s report in future. He said ZRA cannot close some companies because they play a critical role in the economy.

Mr Chanda said there is need to understand the composition of the companies that owe the authority to avoid disturbing those which contribute to economic growth. He was responding to a question from Lukashya independent MP Mwenya Munkonge, who wanted to know what action ZRA is taking against some of the defaulting companies. And Mr Yamba urged ZRA to come up with a system that will identify uncollectable debt tax so that it can be written off. Mr Yamba said debt swap is also one way through which the over K36 billion can be settled. A debt swap is a transaction in which a company’s obligations are exchanged for something of the same value.

“We can also engage contractors and see if we can come up with a payment plan that will benefit both parties,” he said. He said there is also need for a law that provides a time frame after which debt can be written off. Mr Yamba was responding to a question from Kasempa MP Brenda Tambatamba (UPND), who wanted to know what measures ZRA has put in place to reduce debt arrears. Meanwhile, Local Government Accounts Committee chairperson Elijah Muchima (UPND) sent away Mongu Municipal Council officials for not responding to questions as required by the Auditor General’s report.