Commission collects K186mil from GST using IFMS system

THE Internal Revenue Commission (IRC) has collected K186 million in goods and services tax (GST) payments through the integrated financial management system (IFMS), says commissioner general Sam Koim.
Koim said his office introduced the section 65a project to collect GST of all the payments for government service providers and suppliers to government departments.
“At the moment we have conscripted about 38 government departments on that project, most of them are on the IFMS,” Koim said.
“What happens is that when the payments are processed, 10 per cent is automatically deducted and wired to the IRC account at the point of transaction.
“We have configured the section 65a into the IFMS so this has really worked well for us.”
Koim said his office found that previously businesses tended to collect the GST component and while they were expected to pay the 10 per cent to the IRC at the end of the month they did not do that.
“They get their potion of the invoice as well as government’s tax component,” he added.
“Seeing the prevalence of this non-compliant behaviour, we have introduced this arrangement.
“It’s basically changing the default setting at the point of transaction so the payments come directly (to IRC). We are trying to roll it out this year in a big way to all the sub-national governments like provincial governments and districts.
“We were anticipating to capitalise on the election spending but with the ransomware attack on the IFMS, this has significantly affected our projects so that is on hold at the moment.
“We are also looking to roll it out to major businesses such as mining and petroleum companies.
“So in the area of 65a, so far we have collected K186 million directly from the IFMS. The corresponding GST refund claim has been minuscule, the last we checked was about K9,000.
“K185.91 million that’s money that’s always been lost.
“Businesses that have been doing contracts with the government, they get the net invoice that belongs to them, but also get 10 per cent.
“That K185 million is more or less free cash that has always been lost.
“There’s more money to be collected but we can’t do it alone,” he said.