Wed, 26 Oct 2016 11:13:38 +0000
ZAMBIA has been losing colossal sums of money through false fuel declarations by fuel marketers who claim to be in transit to the Democratic Republic of Congo (DRC) then divert the commodity back into the country once they pass the border point, says Energy Forum Zambia ( EFZ) chairperson Johnstone Chikwanda.
Mr Chikwanda said the country was losing huge sums of money through false declarations by fuel marketers who claimed to be in transit to the DRC when, in fact, would instead divert the commodity back into the country once they passed the border.
The gravity of false transit fuel declarations he said could not be underestimated especially in transit countries where fuel price taxation is relatively high such as Zambia due to its strategic location in the region. He said that evading such a huge tax burden had resulted in abnormal profit margins for the perpetrators and partial loss of business for law abiding corporate entities.
He stated that curbing the informal fuel business could not only assist with optimising revenue collections but would also help in ensuring that the country had safe fuel for motorists and protected the business interest of law abiding oil marketing companies.
“By virtue of its unique geographic location, Zambia is a major transit corridor for fuel from different countries destined for the Democratic Republic of Congo (DRC) whose population is estimated to be 72 million,“ he said. He said that the formal fuel business sub-sector co-existed with a booming informal fuel business sub-sector and stated that the fuel business irregularities included making false declaration to the Zambia Revenue Authority (ZRA) border control that the fuel was “transit fuel” when in actual dimension it is meant for sale in Zambia. The EFZ chairperson said that the false declaration had caused the ZRA lose tax revenue in fuel parcel including 16 percent Value Added Tax ( VAT), 25 percent import duty and other levies, stating that in a synopsis ZRA lost more than 40 percent tax revenue with each false transit fuel declared.
The organisation has since called on the Finance Minister Felix Mutati and his counterpart from Ministry of Energy David Mabumba to work on modalities as well as to examine various readily available instruments which could help to increase revenue collection from the fuel sub-sector for the 2017 National Budget and beyond. Mr Chikwanda further explained that the challenge could be best understood if one examined the volume of transit fuel declarations main entry points and compared it with the volume of fuel consumption in Katanga Province where it was purportedly destined.
“To this end, the forum wishes to call upon the Finance Minister to engage with his counterpart at the Ministry of Energy to examine various readily available instruments which can assist him to increase revenue collection from the fuel sub-sector for the 2017 National Budget and beyond. “This booming informal fuel business in Zambia has been going on for a very long time and appears to have signed a permanent co-existence facility with the formal fuel business,” he said.