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Electronic Fiscal Devices as tax tools

ZRA turns to technology for accurate revenue reporting

TOPSY SIKALINDA writes

SMARTER, simpler… with real-time inventory management, tax computation and submission. This and much more is what the all new ZRA Electronic Fiscal Devices have to offer.

EFDs will help your business move from here complaining about reconciliation challenges, pilferage and thefts to proudly pronouncing that your business is not only creating employment, but also contributing to national development through more accurate and consistent revenue declarations because now have clear sight of where your money comes from, where it goes, and what it does for you and your country.

TOPSY SIKALINDA

The Zambia Revenue Authority (ZRA) has implemented the Tax Invoice Management System (TIMS) through Electronic Fiscal Devices (EFD) making it mandatory for every taxpayer registered for Value Added Tax (VAT) and Insurance Premium Levy to use an EFD.

We, at Zambia Revenue Authority, are always exploring new ways to make service delivery more efficient. The introduction of EFDs aims to enable effective collection of the much needed revenue that will help improve our country economically now more than ever before. It starts with you! As a business, ensure that you implement and enforce the use of EFDs in your stores or retail outlets.

As a consumer, ensure that you demand for a receipt on every purchase; or report those that fail to comply. It is your given right to demand a receipt while it’s against the law to bypass or temper with the EFDs. That way, together, we can all be a part of this great effort to advance our country under the My Tax, My Country’s Development agenda

  1. What is an EFD?

Electronic Fiscal Devices means an electronic device comprising among others, Fiscal Cash Registers, Fiscal Printers, Electronic Signature Devices and Virtual Electronic Fiscal Devices that are approved by the ZRA Commissioner General. These devices have fiscal memory and capacity to generate or produce tax invoices and other reports as may be required by the Zambia Revenue Authority

2. What is the purpose of an Electronic Fiscal Device?

The purpose of the fiscal cash registers is to enable the automated transmission of sales transactions  via Electronic Fiscal Devices gadgets that are situated at the business premises (for example at a shop in town) to be sent to Zambia Revenue Authority’s Tax Invoice Management System in real-time.

This means that if a person buys an item, the information is transmitted to ZRA.

3. What does the Authority expect taxpayers registered for VAT and Insurance Premium Levy to do?

  • Taxpayers who have installed and are using the EFD are still expected to file their returns as required by the law as the EFD is only used to transmit sales data to ZRA.  However, using an EFD will make it easier to compile their returns
  • Taxpayers are expected to issue all their invoices from the EFD once installed.
  • What happens to customers who insist on manual tax invoices?

All invoices must be issued from the device. Manual Invoices from Taxpayers who use the EFD are not accepted. Equally, issuing two tax invoices for the same transaction using both manual and EFD invoices is not allowed.

  • Some taxpayers have expressed concern that the invoices issued by the EFD fade easily. What is the life span of the invoices issued from the EFDs?

The life span of the invoices issued from the EFD is beyond the 3 months allowed to claim input tax. Invoices can also be reprinted from the device or from our website www.zra.org.zm

  • Is it possible to reflect buyers’ details on the EFD Tax invoice?

Yes. It is a legal requirement for all invoices issued from the EFD for business to business and business to Government transactions to include the details of buyer. Details such as the Name, TPIN and Address of the buyer are required for taxpayers who need to claim input tax. Therefore, the buyer details should be entered on the EFD.

  • Are there penalties for not using an EFD machine?

Once a taxpayer is registered and receives an EFD, it is a legal requirement to issue invoices from the device at all times. Non-issuance of invoices using an EFD attracts a fine, upon conviction, of up to K90,000 or imprisonment, or both imprisonment and a fine.

However, an offender may be offered a fine in lieu of prosecution in a graduated manner as follows:

  • First Offence…….- K30,000 (100,000 units)
  • Second Offence …..K60,000 (200,000 penalty units)
  • Third Offence ……K89,700 (299,000 penalty units)
  • Subsequent………..No offer of fine in lieu of prosecution (Such cases must go for prosecution)

Furthermore, the law provides for a fine, upon conviction, of up to K27,000 or imprisonment or both a fine and imprisonment for offences that include the following:

  • Entering false data;
  • tampering or manipulating information transmitted on an EFD;
  • , issuing false invoices; and
  • malicious damage or opening an EFD.
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