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04 September 2018

Zambia Revenue Authority introduces data-matching compliance and enforcement program

Executive summary

The Zambia Revenue Authority (ZRA) has announced the introduction of a data-matching compliance and enforcement program. This program entails cross-matching of data retrieved from its Domestic Tax Management System (TaxOnline) to the customs data on the Customs Management System (ASYCUDAWorld).

Detailed discussion

Background

The ZRA offered taxpayers a general tax amnesty from 24 April 2017 to 31 December 2017. During the amnesty, taxpayers were encouraged to declare all unreported transactions as well as resolve their tax indebtedness. In addition, the ZRA had offered taxpayers extended time-to-pay agreements (TPAs) allowing taxpayers to pay outstanding tax liabilities in installments by 30 June 2018. Following the expiration of the last TPAs, the ZRA has embarked on a program to comprehensively cross review all tax returns and customs declarations submitted in 2015, 2016 and 2017.

Enforcement of the program

The ZRA has commenced a review of declarations on their database across all tax types. This is being done by cross-matching the TaxOnline and ASYCUDAWorld platforms. According to the ZRA, the results thus far indicate continued non-compliance in relation to reporting requirements for customs and domestic tax transactions.

All taxpayers whose declarations are flagged by the data matching system will receive notices requiring them to provide an explanation for the identified variations within 14 days of receipt of the said notice. A number of taxpayers have already received notices from the ZRA.

Implications

The ZRA has reminded taxpayers who are in receipt of notifications requiring them to explain identified variations that they are required by law to comply with such a request and to provide any additional information that may be requested. Failure to comply with the request for information and records will lead to the issuance of tax assessments for the unreconciled differences in accordance with the provisions of the Income Tax, Value Added Tax and Customs and Excise Acts.

In terms of the 2018 Amendment Acts, the ZRA is also empowered to levy penalties for failure to comply with information requests within the time specified in the notice. These may apply to taxpayers who fail or delay in providing the requested information.

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CONTACTS

For additional information with respect to this Alert, please contact the following:

EY Advisory Services Limited, Lusaka

  • Patrick Mawire
    patrick.mawire@zm.ey.com
  • Natasha Chansa
    natasha.chansa@zm.ey.com

Ernst & Young Advisory Services (Pty) Ltd., Africa ITS Leader, Johannesburg

  • Marius Leivestad
    marius.leivestad@za.ey.com

Ernst & Young LLP (United Kingdom), Pan African Tax Desk, London

  • Rendani Neluvhalani
    rendani.mabel.neluvhalani@uk.ey.com
  • Byron Thomas
    bthomas4@uk.ey.com

Ernst & Young LLP, Pan African Tax Desk, New York

  • Dele A. Olaogun
    dele.olaogun@ey.com

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ATTACHMENT

PDF version of this Tax Alert

Document ID: 2018-6033

 
 

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