State House press Aide Isaac Chipampe has explained that the established K8 billion economic stimulus package that will be financed through the issuance of the COVID-19 bond is a different package from the K10 billion Medium- Term Refinancing Facility meant to support businesses and households that are being impacted by the virus being implemented through the Bank of Zambia – BOZ.
Cabinet had on June 22, 2020 through its 16th meeting approved in principle the establishment of a K8 billion stimulus package to be allocated to needy areas which include payments of retirees and local contractors and suppliers.
Chipampe told the Zambian Business Times – ZBT in an exclusive interview that the establishment of the K8 billion package will be put into the country’s economy and will mainly improve the liquidity levels in the economy that have reduced due to the the adverse impact of Coronavirus pandemic.
The Zambian Business Times – ZBT had in its editorial dated 21 June 2020 challenged and questioned the Zambian authorities and technocrats why quantitative easing – QE was not being utilized following the negative impact of covid 19.
The editorial stated that “In Zambia’s debt situation [following the UK confirmation that its debt to GDP percentage is now over 100%] the country has domestic arrears which government owes to local suppliers, can’t BOZ be at liberty to borrow the quantitative easing – QE playbook from the Japanese which even the UK has also utilised in times of economic strain to, for instance, create money to buy off government bonds, proceeds from which can be utilised to dismantle arrears and pay off local suppliers?”
It is gratifying to see that the technocrats are taking up the challenge and finding ways to aide the economy to sail through the current covid 19 storm. The Zambian Business Times will continue to be a platform to share and debate key Business, economic and financial matters that cut across all spheres of life in Zambia.
Meanwhile, cabinet also approved the termination of the Avoidance of Double Taxation Agreement between the Government of the Republic of Zambia and the Government of the Republic of Mauritius and initiate negations of a new Agreement which will introduce shared taxing rights and anti-abuse clauses.
Government Spokesperson Dora Siliya has stated in a statement released on June 23, 2020 that Cabinet resolved to terminate the Agreement which came into force on 15th June, 2012 as the Agreement deals with income from a number of specific sources such as business income, dividends, interest and royalties.
“It gives exclusive taxation in the country of residence of the receipt of the income. As such, Zambia does not retain taxing rights to tax dividends, interest and royalties arising in Zambia and payable to residents of Mauritius,” She said.
