Revenue authority prosecutes 175 VAT fraud-related cases, secures four convictions in Q1, 2023

THE Zambia Revenue Authority (ZRA) has this year handled 175 cases related to Value Added Tax (VAT) fraud, as this tax type remains a major problem for the authority.

VAT fraud is going on at a very large scale and has remained the biggest challenge for ZRA, according to its Commissioner General Dingani Banda.

Banda explained that out of the 175 cases related to VAT fraud, four were convicted while six were still before the Economic and Financial Crimes Court.

He said this at a Stakeholder Engagement on Tax Administration Performance during the first quarter of 2023 in Lusaka on Thursday.

“Remember what I said about our number one problem, VAT. VAT is the biggest problem for ZRA as we stand now, there is VAT fraud going on at a large scale.

“So we have had four cases were convicted while 6 cases are still before the Economic and Financial Crimes Court,” he said.

Read more: Zambia capable of generating K17bn from VAT, K9.7bn from CIT if tax net is widened, gaps closed —ZRA

He announced that ZRA had commenced the software-based Electronic Invoicing System Project for fiscalisation as one of the ways to deal with VAT challenges.

Banda said this major reform would turn around VAT.

“We are in the process of acquiring a software-based solution and it is our expectation that by quarter four of this year, you should be in position to use this solution. This is a major reform we are looking at to turn around VAT,” he said.

Banda explained that ZRA had delayed to implement fiscalisation due to the models which were being used.

“What has been a challenge with the previous models, the previous models of fiscalisation were such that ZRA buys the devise and give it to the shop owner, now that devises is expensive. You cannot buy for a longer period.

“So we went to study what other countries are doing, there are different models that have been implemented, in other countries they just accredited the suppliers of the devises,” he said.

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