PF should use same power it exerted in closing Post to collect Airtel’s K588m – Mulongot

Mike Mulongoti has challenged the PF regime to use the same power it exerted when closing The Post to collect the over K588 million owed by Airtel Networks.

He said the Zambia Revenue Authority demand notice to Airtel involving K588,213,860.23 towards indirect taxes was an indictment on the PF regime which swung into action and annihilated The Post over a disputed K80 million debt in 2016.

“Can they ask themselves that they went to court applying for the liquidation of the Post Newspaper on taxes, can we see them swing into action on Airtel? Mind you, this is not the first time. They also raised a similar amount on Lumwana Mine but we have not heard what happened. Why should they go silent? They are now giving Airtel a huge amount, they should not go quiet, and we want to know whether they collected our money. If they are wrong, they should say it. This is the same thing that happened to The Post, and The Post challenged the figures but they were so adamant that they were determined to close them. Whether the amount was right or wrong, it doesn’t matter. Let us see them use that same power over these others,” said Mulongoti.

Last week, ZRA asked Airtel Networks Zambia Limited to pay over K588 million towards indirect taxes covering the period January 2013 to December 2017.
In a letter dated July 27, 2018, addressed to Airtel Zambia managing director and signed by Zambia Revenue Authority (ZRA) excise unit assistant director Patience Siame, the authority stated that its position was based on Section 76B and 139A of the Customs and Excise Act as well as the Seventh and Eighth Schedules to the Act.

“Dear Sir, INDIRECT TAXES-ASSESSMENT AFTER AUDIT- K588,213,860.23 with reference to the Comprehensive Audit covering the period January 2013 to December 2017 which was duly explained to you in our exit meeting held at both ZRA offices on July 25, 2018 and Airtel House on July 27, 2017, a formal assessment to Airtel Network Zambia Plc is hereby issued. Following the engagement mentioned above, our held position is that the fair assessment is K588,213,860.23. This comprising of K151,395,351.58 as the principal Excise duty amount, K23,326,035.95 being VAT, K4,807,411.50 as interest and K408,685,061.20 as penalty at 35 per cent of the duty paid value,” Siame stated. “The breakdown of the assessment is here provided in narrative below: 1. Airtel Mobile Commerce SMS: We would like to note that principal assessment of K19,212,476.58 in Local Excise Duty and K22,106,196.55 in Value Added Tax has been issued. Therefore, the revised penalties and interest are K48,357,305.00 and K4,412,014.07 respectively. The assessment has been revised downwards from the previously discussed assessment. This follows your submission that the current level of business for Airtel Mobile Commerce is not the same as it was at the start of the business and thus an estimate of 50 million SMS per month which is based on 2018 will be an over estimation. In that regard, the turnover ratios based on Airtel Mobile Commerce Financial Statements for the period under review have been used to come up with a reasonable volume of SMS per month. You will appreciate that this is highly considerate as it has taken into account the SMS generated in 2011 and 2012.”

Siame requested Airtel to consider the fact that Airtel Mobile Commerce and Airtel Networks Plc were two separate legal entities and that a service was provided as an SMS, which was taxable supply.
On Airtel Network Plc SMSs, Siame stated that in view of the fact that the Airtel had been supplying itself with airtime (SMS-text messages) such as its advertisement and notifications of balances, an assessment of K132,135,000.00 had been raised and that a penalty of K360,197,250.00 had been charged.

Commenting on the issue, Mulongoti said the PF regime’s inconsistencies was catching up with them as lies were hard to sustain.

He charged that the ZRA demand notice to Airtel Networks showed that the PF’s deception was beginning to fallout.

“Things are catching up with them because of their inconsistency. The truth sustains itself and a lie must be sustained so let us see how they will justify why they can allow Airtel to continue operating when they owe that much and The Post owed less than that. They went for The Post and we saw all manner of people rising up to see that The Post be closed. This is an indictment on them. We are keeping our eyes and ears very open, but anyway we are comforted by the fact that they are an illegal regime as you saw the elections were not held under the law,” Mulongoti said.

He wondered why the PF regime was quick to ‘kill’ a Zambian-owned company On the pretext of taxes while a foreign company was allowed to continue operating.

Mulongoti, the People’s Party president, further lamented the crushing of the middle class whom he said was heavily indebted.

“This means that all those who got money illegally have got to explain to the people of Zambia why they cannot pay back the people of Zambia that money. Their inconsistency and deception is beginning to fallout and I am not surprised that they can have that kind of discrimination where they kill their own company – Post Newspaper was a Zambian company, and Airtel is not a Zambian company. They protect the foreign company and kill their own. In fact they have gone beyond that, they have crushed the middle class, they have given the middle class contracts but have not paid them,” said Mulongoti. “Most of them are heavily indebted and there is all this duplication where ZRA is pursuing interest on outstanding taxes when the same government is not paying those people. Surely do you need to be told that this is inconsistency? If there is money owed to ZRA and the government owes [these people] money, they should do what is called net off so that the one who owes that other begins to think of how to remedy. What they are doing is that they are pushing interest charges on outstanding taxes in the meantime the government is not paying them for one, two, three, four years…surely what kind of government is that? And ZRA can sit quietly and say all is well?”

Source: The Mast

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