THE Zambia Revenue Authority (ZRA) misapplied KR445 million (K445 billion) in mineral royalty tax from a total collection of KR692 million (K692 billion), the latest Auditor General's report has revealed.
According to the report for the financial year ending December 31, 2011, out of the KR692 million collected as mineral royalty, only KR247 million was traced to the bank statements, leaving a balance of KR445 million unaccounted for.
An examination of accounting and other records maintained at the ZRA headquarters and 10 stations revealed that ZRA recorded an overall surplus of over KR313 million (K313 billion) during the period under review.
The stations included Nakonde, Kasumbalesa, Ndola direct tax, Kapiri Mposhi customs, Livingstone direct tax, Kazungula, Chipata direct tax, Mwami, Chanida, and Chirundu,
The report, however, stated that there was a total deficit of more than KR494 million (K494 billion) in respect of some taxes.
Out of a total amount of KR1.7 billion (K1.7 trillion) collected as mining tax arrears (windfall tax arrears), KR1.6 billion (K1.6 trillion) was traced to the bank statements, leaving a balance of over KR84 million (K84 billion) unaccounted for.
On reduction of tax arrears without supporting payments, eight companies at headquarters had their company tax arrears amounting to over KR811, 000 (K811 million) in 2011 without evidence of payments, authority to reverse or any statement of reconciliation.
The report said 227 companies at headquarters and 46 companies in Kitwe had their Value Added Tax (VAT) arrears amounting to over KR98 million (K98 billion) in 2010 reduced by more than KR48 million (K48 billion) to KR49 million (K49 billion).
"The reduction of K48, 979,013,498 should have been supported by payments, authority to reverse or any statement of reconciliation," the report says.
However, a scrutiny of payments received in 2011 revealed that only KR20 million (K20 billion) was actually supported by evidence of payments, leaving a balance of over KR28 million (K28 billion).
On VAT refunds to tax debtors in Kitwe, the report states that VAT refunds in amounts totalling over KR10 million (K10 billion) were made despite the same taxpayers owing ZRA in various unpaid taxes totalling more than KR14 million (K14 billion).
A review of the 2011 customs debt stock revealed that amounts totalling over KR82 million (K82 billion) remained uncollected as of November 2011.
In response, the ZRA management said that out of the debt of KR68 million (K68 billion) above 365 days, First Quantum Mining and Operations Limited accounted for over KR29 million (K29 billion), and Zambezi Oil Transport Company limited with over KR18 million (K18 billion).
Others were Tanzania-Zambia Railway Authorit