By BUUMBA CHIMBULU
REVENUE collection has become more critical during the current Covid-19 pandemic as more resources are needed to ensure a stronger economy.
Tax is essential as it is used to develop the country while making the economy stronger, says Zambia Revenue Authority (ZRA) Corporate Communications Manager, Topsy Sikalinda.
“This investment is channelled towards the health sector, education, and social-economic sectors such as water and sanitation.
“The need for these resources is greater during this difficult period when the whole world is faced with the Covid-19 pandemic as more resources have to be channelled towards the health sector to fight this pandemic,” Mr Sikalinda said in interview.
Mr Sikalinda also discussed refunds under Pay as You Earn (PAYE) where he explained that this was the system an employer used to take income tax contributions before they paid wages or salary.
He further explained that all withholding taxes were intended to be taxed once income was earned stating that only withholding on wages or salary was normally known as PAYE.
“Let us start by understanding that a tax refund is a refund of tax that has been overpaid, Pay as you earn refund mostly mistaken as a pension or guaranteed refund of all PAYE paid during one’s employment is not refundable at all.
“What is refundable is not the tax paid during employment but the overpayment on the PAYE that may have resulted from payroll errors or unwarranted deductions concerning income tax,” Mr Sikalinda said.
ZRA, he said, noted with concern that its offices were confronted with numerous cases of the PAYE refund with most people thinking it was guaranteed income or refund after separating with their employers.
PAYE, Mr Sikalinda explained, could be refunded only if there was a genuine mistake in the tax computation by the employer resulting in the employee being overtaxed.
“This is so even on all other tax types. A refund can be made when an employee did not exhaust the tax credit for that particular charge year or when getting a refund of tax deducted on tithe from an approved public benefit organisation with a valid certificate,” he said.