In a landmark crackdown on tax evasion, the Zambia Revenue Authority (ZRA) has successfully recovered over K10.6 million in lost government revenue from four companies operating in Kitwe. This significant victory in the fight against tax fraud marks a pivotal moment in Zambia’s efforts to ensure fiscal responsibility and economic growth.
The companies in question, Eagles Eye Transformation Limited, Taurus Mineral Resources Limited, Mineral Junxion and Transport (Z) Limited, and Focus on Equipment Limited, along with their respective directors, Lifen Tang (aka Linda) and Xing Tang, found themselves in hot water as they faced criminal charges of false statements and returns, as well as tax evasion. These charges were brought forth under sections 43 and 44 of the Value Added Tax Act Chapter 331 of the Laws of Zambia.
The alleged wrongdoings took place between January 1st, 2020, and August 31st, 2022, in the bustling city of Kitwe. During this period, the companies furnished the Zambia Revenue Authority with misleading Tax Invoices, falsely claiming purchases of taxable goods from other local businesses on the Copperbelt. These deceptive actions resulted in substantial losses for the Zambian government.
Additionally, the accused companies and their directors fraudulently claimed Value Added Tax refunds and interest, totaling K10.6 million, by submitting counterfeit returns indicating that taxable supplies had been made to their businesses by various Copperbelt-based companies when, in reality, no such transactions had occurred.
The cumulative impact of these actions caused the Zambian government to lose a staggering K10.6 million in tax revenue and interest.
In a decisive turn of events, the accused companies and directors entered into Plea Agreements with the State, represented by the Zambia Revenue Authority. These agreements stipulated that the companies would repay the evaded taxes and interest, refund the K1.2 million incurred in prosecuting the cases, and that the directors would plead guilty to all charges. Upon fulfilling these conditions, the State would withdraw the charges against the directors.
In a recent court hearing held at the Economic and Financial Crimes Court in Kitwe, it was announced that all the terms and conditions of the Plea Agreements had been met. The accused parties had reimbursed the State with the full amount of K10.6 million in evaded taxes and interest, as well as the K1.2 million for prosecution costs, resulting in a total sum of K11.8 million paid to the State.
In light of these developments, the charges against the directors, Lifen Tang (aka Linda) and Xing Tang, were officially withdrawn. Both directors had previously pleaded guilty on behalf of their respective companies to charges of false returns, false statements, and tax evasion.
The Economic and Financial Crimes Court, considering the full cooperation and compliance of the convicted companies, exercised maximum leniency in its sentencing. The convicted companies were ordered to pay fines amounting to K35,200, a sum which has already been settled.
The Zambia Revenue Authority seized this opportunity to send a stern warning to all taxpayers. They affirmed their commitment to prosecuting any taxpayer found guilty of tax evasion to the fullest extent allowed by the law. The ZRA also encouraged all citizens to contribute their fair share of taxes, emphasizing that Zambia’s development relies on the collective responsibility of its citizens.