Varun Beverage Company is seeking a court order to quash government’s decision to revoke its five year tax deferment.
The beverage company has contended that the revocation is in defiance of the rule of natural justice as the firm was not afforded an opportunity to be heard.
Varun Beverages, the manufacturers of Pepsi have also stated that the verdict is tainted with procedural impropriety.
The Company says it was not given a chance to make submissions before the Zambia Revenue Authority -ZRA- Commission of Inquiry which recommended the revocation of the tax deferment.
Varun Beverages has argued that it had legitimate expectation to continue to enjoy the tax relief following its investment of US$44 197 000
The Company notes that section 56 of the ZRA Act empowers a company with an investment over US$500 000 to enjoy tax exemption.
This is according to an application for judicial review filed in the Lusaka High Court.
Varun beverage was given a five year tax deferment by the previous regime in 2010 which has now been revoked by the Patriotic Front Government.
[ZNBC]
And some ***** was claiming that there is no such a thing as vat deferment.If you are not competent to comment on issue beyond your comprehension just zip it and continue praise singing.
You foo.l have you ever heard of a zambian company being given such incentives. think before you sh.iit.Â
You are a morron.
does pf know that investor confidence has dwindled? don’t hurt, but correct things. this is the mistake chiluba made, he messed mansa batteries, livingstone motor assembly plant and many more, african presidents just irritate me.
None starter. How can you sue over an ILLEGAL tax exemption? Just own up and pay taxes you imperialists.
How can it be illegal if it is based on the law of the land?
PF government is really messing up.If some brings $44million of their own money into your country why do you want to mess them up? Why would future investors want to invest in zambia?They have built infrastructure that is going to be of benefit to zambia for many years to come.
Dont be silly. If they have brought in that much cant you just imagine how much profit they are making which is going out? What will be the nation’s benefit if they dont pay tax for five years? Dont be so shallow. They would not invest so much where there are no profits. Who needs pepsi anyway. People should be drinking fruit juice and maheu and other more healthy products.
This government is killing investor confidence, one wonders how they hope to create employment for the many youths who voted for them!
The Multinational firms want to make easy money. They want to quickly recoup their investiment within a short period of time. pay the taxes without fail.
I think they deserve to be heard. How can you make a judgement based on just one side of the story as happened in this case (and most of the other COI appointed by MCS).
Can I get a PAYE exemption too?
The so called fake investors, just PAY CAESAR WHAT BELONGS TO CAESAR period……
You are exempted from certain corporate taxes and that has not been taken away from you, but not remitting sales tax you collect from consumers on behalf of govt. This was not your money just like PAYE deducted from employees’ salaries
That exemption by MMD govt was cataclysmic to the country ab-initio
Your law suit is just an academic exercise in futility, just drop it and use that money to improve conditions of service for your employees
they need to pay tax or tell them to go to hell with their pepis r banda was a crookÂ
Nshisunda fimo fimo, you are right. I agree with you patritic son of the land of victors including chipolopolo.
Not Sales / Value Added Tax…
hahaha , this is nonsense, VAT is paid and not exempted in the Land of Zambia. Every person pays VAT which companies collects on behalf of Gonvernment. So , if as a consumer has paid VAT and then this tax ends up in the pockets of these invesors…is this not stealing from poor consummers? Please the law suit is an exercise in futility. Gone are the days of tax hollyday with RB.
There is nothing like eroding investor confidence. Some of these investors are CORRUPT. How can you collect VAT on behalf of Government but keep it to yourself? Why is this incentive not given to other companies eg Zambian Breweries. VARUN just pay like you do where you come from.
Page 10 of the ZDA ACT
2.3.2. Value Added Tax:
The VAT incentives are;
• Relief for VAT registered enterprises on imports of eligible capital goods. (VAT deferment);
• Zero rate on export of taxable products;
• Relief of VAT on transfer of business as a going concern;
• Equal treatment of services for vat-reverse VAT;
• Cash accounting for specialized associations e.g. association of building and civil engineering contractors;
• VAT relief on input tax paid for purchases made by registered suppliers.
• Input tax claim for three months prior to vat registration for businesses that have already commenced trading;
• Reduction of VAT rate for investors in tax free zones.
Viva PF,come on guys how can any sane person say investor confidence has dwindled..? real investors wont back off b-coz they know they have to pay tax,so if they are real and not crooks lyk RB then they wont fight this coz I believe they dont have a case,so my advice shut up and pay tax and move on otherwise we dont need your pepsi…Micheal Jackson hated pepsi after all…
Which Tax is this? There’re so many.
Just pay bafikala imwe.
Sugar water with no nutritional value deserves to be taxed. They should get the tax breaks back if they start producing something that doesn’t make its customers fat and diabetic.
Just pay tax or pack up and go. You are getting a lot of money from Zambians and when they ask you to give back your dues you start complaining! After all you are ever involved in capital flight outbound from Zambia month in month out. Just pay tax so that we repair schools, build hospitals, construct roads etc and pay our civil service. It is from you we are supposed to get the tax just like from every company and employees. Just pay it or go wherever you want. The void will be filled by other upcoming business people. Forget the brown envelops you gave RB & company just to get favour of tax deferment. Â
Just pay up!
UGLY TRUTH
Thanks for th infor.. my VAT shud be paid to th govt coffers, let these guys enjoy th other incentives… NOT VAT and PAYE….wht went wrong wth th guys who gave them such a deal kanshi?
GO BACK TO INDIA YOU FOOL.WHERE THERE IS NO VAT OR TAX .. OR ASK RB YOUR FRIEND TO PAY IT FOR YOU.BESIDES THERE IS VAT ADDED ON ALL YOU BEVERAGES SOLD .SO JUST PAY AND STOP WASTING OUR TIME.
VAT JUST LIKE PAYEE IS COLLECTED ON BEHALF OF GRZ AND PAST OVER TO GRZ. WHY SHOULD A COMPANY BE ALLOWED NOT TO PAST THIS TAX TO GRZ. THIS GRZ MONEY, SIMPLY COLLECTED ON ITS BEHALF. ONE CANNOT BE EXEMPTED FROM REMITTING VAT OR PAYEE
Let the law take its course. Good they have sued. Let the lawyers argue this out, not bloggers.
Only in Zambia an a corporation sue the gov’t for removing a luxury tax relief or that matter!!Â
One would imagine that if the Law does provide for Tax breaks after an initial investment of $500,000.00 USD then there is an issue for the courts to determine. It was a law that would have been debated and approved by Paliament as an incentive to attract foreign investors to invest in industries that would contribute to real economic growth with job creation for Zambians as opposed to one office businesses that operate from outside the country (South Africa in mind). Makes sense to allow them corporate tax break to quickly recover their huge initial investiment. If a Zambian invested this kind of money, they too would deserve the same break.
Only in Zambia can a corporation sue the gov’t for removing a luxury tax relief which gives competitive advantage over its rivals!!
The level of ignorance by our PF collegues is appaling. If these were just cadres posting here you would be excused to think the country is in safe hands, unfortunately this is the level of thinking even at the top level of the current government.
Tax incentives are used by China even to this day to attract investment and thats how a lot of western companies now operate in China. RB’s MMD would have brought a lot of investement had he been given time, now education , or lack of it seems to be what will send that impoverished country into oblivion. Soon you you will be eating copper which is still buried miles undergroung due to lack of investement in mining.
Varun,never got any buildings like. Zambrew/coke did fm govt. sabmiler got zambrew for a song and remember that even sata took them to court over them giving sab standard products. let zambrew tell the nation how much sabmilner got company fm govt.
Seriously these guys from Varun beverages are acting as if they are the only people in zambia that have made such a large investment.  You think other companies like DK Enterprises, California Beverages, Zambia Bottlers and Invesco have invested 10,000 kwacha in the country.  They have probably invested more than you can imagine and have been in the coutnry longer than you have.  They have also done so much towards community welfare so please varun just drink your own pepsi if you dont want to pay tax.  Respect PF. Â