Zambia simplifies VAT refunds to resolve row with mining companies - CNBC Africa

Zambia simplifies VAT refunds to resolve row with mining companies


by Reuters 0

Zambia has relaxed the rule requiring exporters to produce documents from destination countries to claim tax refunds. PHOTO: Getty Images

This was announced by the revenue authority in a move to resolve a row that threatens investment in Africa's second-biggest copper producer.

Zambia has been withholding the VAT payments from mining companies and other exporters it says have not produced import certificates from destination countries - a step the government says is needed for greater transparency.

(READ MORE: Zambian president directs government to resolve mining tax rows)

Zambia Revenue Authority commissioner general Berlin Msiska said in a statement that the authority would now accept transit documents from exporters claiming VAT refunds.

Msiska said exporters would no longer be required to prove that their export proceeds had been remitted into a bank account in Zambia in order to claim VAT refunds.

(READ MORE: Zambia's Konkola says needs tax refunds to return to profit)

Energy and financial analyst Andrew Kamanga of the local consultancy firm Enfin told Reuters the new rule would make it easier for mining firms to claim their refunds.

However, Kamanga said mining companies and other exporters would still be required to produce import certificates for them to claim refunds owed prior to the amendment of the law.

The industry says that it is almost impossible to produce such documentation because it sells to multi-national trading houses, and has for months been saying it is owed over 600 million US dollars.