Zambia to Introduce Electronic Fiscal Devices Management System

The Minister of Finance Mr. Felix Mutati announced the introduction of the Electronic Fiscal Devise (EFD) Management System in the administration of Value Added Tax (VAT), in his 2017 Budget Address to the National Assembly on 11th November 2016. This system requires the mandatory use of Electronic Fiscal Devised by all VAT registered businesses.

Once installed, the fiscal devises control sales and invoicing systems for  businesses and they store transactions data in a permanent fiscal memory that is only accessible by the tax administration. The transactions data is transmitted to the servers of the tax administration in real-time.

The measure was expected to be implemented in the year 2017 and was expected to contribute towards improvement of revenue collection during the year 2017, but the implementation has delayed. The Minister of Finance, in his 2018 budget address on 29th September 2017 to the National Assembly on 29th September, 2017 attributed the lower than expected revenue performance for the year 2017, among other factors, to the delayed implementation of the Fiscal Device Management System.

Fiscal devises come in different forms to suite different types of businesses. The most commonly used devices on the market include:

  1. Electronic Tax Registers (ETR).
  2. Electronic Fiscal Printers (EFP).
  3. Electronic Signature Devices (ESD).
  4. Sales Control Device (SCD) Modules.

Electronic Tax Register

Electronic Tax Registers are similar to the ordinary electronic cash registers that are ordinarily used by retailers. The only difference is that they contain a fiscal memory that captures core tax information such as the classification of goods, value of goods sold, rate of tax, and tax value. This memory can only be accessed by the tax administrator. The ETRs are best suited to smaller retail establishments.

Electronic Fiscal Printers

Electronic Fiscal Printers are used in conjunction with other types of sales recording devices. They contain a fiscal memory and have the same characteristics as those described for ETRs. They are also suitable for small retail establishments and, in conjunction with POS terminals, they may be used by larger retailers.

Electronic Signature Devices

Electronic Signature Devices attach an electronic signature to a Tax Invoice.  They are used where a
computerized sales and invoicing solution is already in place. They are plugged into the computer network,
and any request to generate a receipt or invoice results in the ESD generating a hash key that is printed
to the document.

ESDs are suitable for medium-sized businesses or retail situations where there is a likelihood of returned

Sales Control Devices (Modules)

Sales control devices (SCDs) combine the features of an ESD with the provision of a fiscalized
external memory. They provide all the benefits of an ESD, allowing for an easy check on the integrity of the data on the receipt and allow many cash receipting devices to be connected or networked to the SCD, thereby reducing the need to deploy fiscal devices for each register or terminal.

SCDs are suitable for large retail networks or businesses with several geographic sites.

Countries that Have Implemented the Fiscal Device Management System

Countries that have implemented the Fiscal Management Device System in Africa include Kenya, Rwanda Tanzania, Malawi and Zimbabwe. In Europe they include Greece, Romania, Bulgaria, Hungary, Kosovo, Montenegro, Moldova and Sweden. In South and Central America they include Mexico, Dominican Republic, Panama, Argentina, Brazil, Chile and Paraguay. Only South Korea in Asia and non in North America.

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