By Elias Chipimo
Let me start with a surprising statement: every finance minister since 1997 has been refunding mining companies for the VAT that they pay when they bring goods and equipment into this country. This includes Edith Nawakwi (under President Chiluba), Peter Magande (under President Mwanawasa) and Situmbeko Musokotwane (under President Banda).
It was therefore surprising to see the current finance minister, Mr. Alexander Chikwanda, being criticised in the media recently by some of his predecessors for advocating VAT refunds to mining companies - something they themselves did regularly over the past 17 years.
Confused? Well just remember that politicians will say whatever they think people want to hear whereas true leaders will seek to speak the truth. Let us, therefore, attempt to shed more light on this issue. To do so, however, we will need to examine three things: (i) how VAT works; (ii) why VAT Rule 18 was introduced; and (iii) how it has been enforced by ZRA over the years. But before we do this, let us briefly consider why this is an important issue.
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