FAIR TAX APPEALS – A LIFE LINE OF AN EFFECTIVE TAX SYSTEM

CARDINAL to good tax administration is a fair and efficient tax system, which includes a mechanism for taxpayers to appeal against tax determinations they may not agree with.

As a national tax administrator, the Zambia Revenue Authority (ZRA) is committed to offering best services to taxpayers in its quest to collect revenue. In order to ensure that the Authority only collects that which is genuinely due from taxpayers, it has established mechanisms that allow taxpayers to appeal against tax determinations when they feel aggrieved. 

The Authority’s ability to recognize the potential for error or bias in its tax determinations and to provide taxpayers access to an independent appeals process is one of the most important indicators of the Authority’s fair treatment of its taxpayers.

ZRA is  aware that  taxpayers may dispute the accuracy of the facts relied on by the Authority in an assessment, the correctness of the interpretation of law, the amount of penalties imposed or the appropriateness of statutory procedures followed thereby giving rise to a tax dispute.

A tax dispute is a disagreement between a taxpayer and a tax administrator arising from a decision made by a tax authority, in this case ZRA.

Tax disputes are not peculiar to Zambia as tax administrations around the world face various tax disputes with the taxpayers due to differences in the interpretation of the tax laws. However, at the heart of any tax administration is the need to ensure that it collects the correct taxes. Therefore, the importance of having an independent tax dispute resolution process cannot be overemphasized.  It is essential that any disputes that may influence negatively the timely collection of revenue are resolved expeditiously, with due regard to the law in an environment where all parties to the dispute have a say in the resolution process. 

In this regard, the ZRA has a well-established and dedicated Tax Appeals Unit to deal with tax disputes that may arise from time to time. The Unit has a clear dispute resolution process which aims to:

   • ensure that disputes are professionally and efficiently handled in a manner that inspires confidence on the part of taxpayers and the general public;

   • provide an objective review of decisions made by the Authority’s Operating Divisions;

   • provide an administratively independent review of disputes under the Office of the Commissioner General where an objection, appeal or review is dismissed by the operating division;

   • reduce the number of litigation cases arising from tax disputes; reduce the overall period of resolving objections, appeals or review; and

   • inform the taxpayers of their rights at each stage of the dispute resolution process.

In resolving tax disputes, the Unit applies the following elements to resolve disputes in a timely and fair manner, the Unit approaches all issues with Neutrality. That is to say all appeals are dealt with in an independent and objective manner. 

Further the Unit comprises officers who are equipped with the necessary knowledge and

experience in handling all manner of tax disputes. The Tax Appeals Unit is dedicated solely to resolving tax disputes.

In order to ensure that the disputes are resolved expeditiously and professionally, the

Authority is committed to –

a) Inform the taxpayers of their rights and responsibilities

b) Explain the taxpayers’ rights of objection, review or appeal and the underlying process

c) Explain to the taxpayers’ rights of appeal to the Tax Appeals Office and the Tax Appeals Tribunal and the underlying process; and

d) remain responsive, be timely, fair and impartial in the dispute resolution process.

Taxpayers have the rights to engage the ZRA whenever they are dissatisfied with the decision made by the Authority. However, taxpayers are also required to fulfill certain responsibilities that can lead to dispute avoidance or effective dispute resolution. 
Taxpayers should;

• Know the taxpayers’ rights of objection and the process;

   • Understand the taxpayers’ rights of appeal and the process;

   • Avail ZRA a statement as to how they understand the facts and the law, listing all issues with which they disagree and why; 

   • Provide ZRA any additional information or documentation that will be helpful to their case, within a reasonable time; and

• Notify ZRA when and how they think their case should be resolved.