By Mildred Chama
Every country needs revenue to provide public services like health, education, social services, roads, and a wide range of other facilities for all its citizens. Equally, the Zambian government provides these services to the public through money received from taxes.
Tax revenue is a vital component of Zambia’s domestic resource mobilisation, as this is what provides government the capacity to invest in development, reduce poverty, run the civil service and provide public services.
To collect the correct taxes, the Zambia Revenue Authority (ZRA) relies on proper documentation of business transactions. Businesses thus need to ensure they keep all their transaction records well. Legally, business entities and individuals should keep these record for 6 years and should produce if requested for by ZRA.
One such important document is a receipt. It is mandatory for every Value Added Tax (VAT) registered supplier to issue a tax invoice and receipt for every supply of goods or services. A tax invoice primarily contains details of goods or services sold, quantity, price, taxes charged, and taxable value and should be issued at the time of supply by all registered VAT taxpayers. A receipt should be issued to the buyer also as proof of
For the business entity, the issuance of tax invoices is essential to evidence the supply of goods or services and the amount of money the buyer is expected to pay.
From a buyer’s point of view, receipt for goods purchased or services availed is essential to claim the input tax credit. A customer is entitled to ask for a receipt upon payment for goods or services. Ideally, a receipt must be issued to the buyer at the point of a sales transaction.
Issuance of receipts help businesses keep good records of the financial transaction during auditing of the company. They represent proof of a financial transaction. By keeping track of all transactions, a business is also able to track all the revenue coming into the business through sales.
Since it is the customer’s proof of purchase, customers can use them to return goods which can be for a number of reasons. Receipts are equally important for buyers as well, especially if they want to reclaim the VAT on a particular product purchase.
Records kept through information on receipts helps ZRA collect the correct taxes from business and individuals.
The law clearly stipulates that sellers should ensure they issue legal receipts to their customers for every purchase made. Further business must note that issuance of more than one tax invoice or receipt for the same sales transaction is not allowed.
ZRA is keen to help taxpayers with challenges in the issuance of receipts. Taxpayers are encouraged to ensure the use the legally acceptable receipts to clients after every transaction to avoid abrogating the law and incurring penalties that come with non-compliance.
We urge all consumers of goods and services to develop a culture of always requesting for a receipt whenever a purchase is made.
For more information contact the ZRA National Centre on 4111 or email advice@zra.org.zm
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