• 11 companies have successfully been prosecuted.
• ZRA is concerned with increases in cases of fraudulent VAT refunds claims
• Currently, the stock of outstanding VAT refunds claims is K49.4 billion, out of which K18.8 billion, is approved but pending payment.

Zambia Revenue Authority (ZRA) has disclosed that 258 companies are currently under investigation over fraudulent Value Added Tax (VAT) refunds claims.
Addressing journalists at a press conference in Lusaka, Authority Commissioner General Dingani Banda revealed that 11 companies have successfully been prosecuted in the Economic and Financial Crimes court.
Mr. Banda expressed concern over the rise in the number of cases involving fraudulent VAT claims, a situation he says needs to be seriously addressed as it has been a major challenge for some time now.
He also disclosed that currently, the stock of outstanding VAT refunds claims is K49.4 billion, out of which K18.8 billion, or 38.1% is approved but pending payment.
“74.5% of the total outstanding VAT refund claims are related to the tax periods prior to 2023. Current measures to address VAT challenges include, increase of monthly refund allocation to K1.35 billion per month from October 2021, as opposed to previous average of K850 million per month.”
“Other measures include introduction of the First-In-First-Out methodology for payment of refunds and Exempting withholding agents and large taxpayers from withholding VAT. Prosecution of VAT refunds frauds,” Mr. Banda stated.
Meanwhile, Mr. Banda revealed that ZRA has collected K105.4 billion gross revenue from January to November, 2023, with only 888 or 0.2% out of 520,387 active taxpayers at end of September 2023, contributed 80% of the gross revenue collected during first nine months of the year.
He explained that during the period under review, net collections stood at K4.5 billion or 4.7 percent below the target of K95.5 billion, while refunds amounted to K14.9 billion.
Mr. Banda said with regards to mining company income tax, ZRA collected K5.3 billion against the targeted K12.3 million, resulting in a deficit of almost K7 billion while mineral royalty deficit stood at K1 billion but was compensated by the performance of other tax types such as domestic VAT.
He stated that the Authority collected K23.6 billion of domestic VAT, with refunds standing at K14.6 billion, resulting in a net performance of K8.9 billion, while import VAT collection was K20 billion against the expected K17.9 billion, exceeding the target by K2 billion.
Mr. Banda noted that in the period January to September, 2023 the production of 520,182.8 metric tonnes of Copper was 21.0% below the period’s 2023 Budget estimate of 658,864.3 metric tonnes, a move that negatively affected revenue performance, coupled with low compliance to Pay As You Earn (PAYE) and Rental Income Tax.
“For the January-November period, the revenue target for 2023 grew by 73.9% and largest growth was recorded in Company Income Tax and then Withholding Tax.
“Mining Company Income Tax and Mineral Royalty were K7.0 billion or 56.8% and K1.1 billion or 13.5% below target, respectively. Domestic VAT was marginally below target at K13.9 million or 0.2%, while domestic VAT was above target by K2.0 billion or 11.7%,” he explained.
The ZRA boss further disclosed that the Authority targets to collect K125.3 billion revenue in 2024, representing growth of 21.5% from the 2023 target, which amounts to 19.5 percent of Gross Domestic Product (GDP), with tax to GDP ratio expected to be over 20% for the period 2024-2026.
“ZRA target steeply increased in 2022 by 53.3% from 2021 and relative to 2021, the 2024 target increased by 111.1%. The 2024 ZRA target amounts to 19.5% of GDP. The main growth drivers in 2024 are projected to be, Mining, ICT, Agriculture, Manufacturing, Transport, Tourism, Financial and Insurance. ZRA will align its strategies to optimize tax collections from these sectors as they grow.
“Comparatively, with January –November 2022, Net collections were 9.8% higher than those recorded over the same period in 2022. VAT at 63.1%, PAYE at 7.7% and Withholding Tax at 16.3% drove the 2023 increase in collections. On the contrary, collections of Mineral Royalty and mining Company Tax were lower in January-November 2023 compared to same period in 2022,” he noted.