THE Lusaka High Court says it is not outrageous for Zambia Revenue Authority (ZRA) commissioner general Berlin Msiska to demand full payment of K26,856,230 in tax obligations from The Post Newspapers Limited.
This is in a case in which The Post Newspapers Limited was seeking judicial review into Mr Msiska’s decision to reply to its letter addressed to the commissioner-domestic taxes.
The Post also wanted the court to compel ZRA to allow it to pay its tax liabilities in instalments.
High Court judge Mwiinde Siavwapa said in a judgment delivered on Thursday last week that The Post was allowed under a previous arrangement with ZRA to pay it tax obligations in instalments after penalties and interest were waived and that this was fulfilled.
Mr Justice Siavwapa said The Post again defaulted on payment of taxes as a result of which a “Time to Pay (TTP)” agreement was entered into with ZRA but that the company failed to fulfil its tax obligations.
He said the commissioner-general refused to allow instalment payment this time around based on that background and it was not outrageous for him to make such a decision.
“It is the kind of decision that, in my view, a right-thinking person, more so, a person tasked with the responsibility of receiving and collecting revenue on behalf of the republic, would make,” Mr Justice Siavwapa said.
He said The Post argued that demanding full settlement of the debt by ZRA was tantamount to an act of shutting the newspaper company, which had implied that it had no capacity to liquidate the debt in that fashion.
“My view is that logic demands that a debtor must pay what he owes the creditor if the creditor refuses to accept instalment payment. The commissioner general used his discretion to reject the proposal and judicial review must not be used to fetter such discretion when exercised within the law and in good faith,” Mr Justice Siavwapa said.
He said courts should not be used to sustain insolvent entities by keeping creditors out of funds due to them as and when the funds fall due and are demanded for by the creditor.
Mr Justice Siavwapa said other avenues between the newspaper company and the ZRA should have been explored to give some respite to the company if it is facing financial distress and that judicial review was not that option.
He said taxes are law and failure to pay and collect taxes undermines operations of Government and that the commissioner-general of the ZRA should use his sober judgement and honest discretion not to allow defaulting entities to be shut down.
“It is, therefore, my hope and trust that the commissioner general, acted in utmost good faith towards the applicant as a taxpayer and that his action will not lead to the throwing of many people on the streets, which will be negative on the economy of the country,” Mr Justice Siavwapa said.