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Zambia Revenue Authority introduces electronic tax clearance certificate compliance checks on imports

Executive summary

The Zambia Revenue Authority (ZRA) has announced the introduction of an Electronic Tax Clearance Certificate (e-TCC) compliance check between its Domestic Tax Management System (TaxOnline) and its Customs Management System (ASycudaWorld). This is for the purposes of charging Advance Income Tax (AIT).

Detailed discussion

Section 81C of the Income Tax Act Chapter 323 of the laws of Zambia provides for the imposition of AIT of 15% on importations where an importer is not tax compliant. AIT only applies to the importation of goods for commercial purposes and is payable at the port of entry. The tax paid is a credit against the importers’ final corporate income tax liability if the importer can demonstrate that they have been tax compliant.

Currently, tax compliance for domestic taxes (Corporate Income Tax, Value Added Tax, Pay As You Earn and Withholding Tax) is evidenced by possession of a valid Tax Clearance Certificate (TCC).

A TCC is usually issued for a calendar year when a taxpayer is deemed compliant. Once a TCC is issued, it remains valid until the expiry date indicated on the certificate, regardless of the compliance status of the taxpayer.

The ZRA has now announced the implementation of the interface between AsycudaWorld and Taxonline. This interface will allow for automatic and “real time” verification of the importers compliance status. Should the Taxonline system reflect non-compliance, the AIT will apply even if the importer has a valid TCC. This is effective 1 July 2018.

Implications

All taxpayers involved in the importation of goods should immediately review their tax compliance status as the AsycudaWorld system will automatically charge AIT against the value of the imports being declared at the time.

Taxpayers who have been charged AIT will be informed via electronic mail, as registered in relation to their Taxpayers Identification Number, of the steps required to correct their compliance status.

EYG no. 010101-18Gbl

Download this Tax Alert as a PDF file.

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