The Ministry of Finance has announced that it had deferred the implementation of the migration from the Value Added Tax – VAT system to the Goods and Services Tax – GST to July 1, 2019 by its revenue agency, the Zambia Revenue Authority – ZRA.
Giving an update during a parliamentary session, Finance Minister Margerate Mwanakatwe stated that government has made progress and that the draft GST bill is ready and will be presented to the legislators on 4 April 2019.
She explained that the implementation of GST is meant to address the perpetual net refund position to tax payers, a situation that has resulted in the accumulation of VAT refund arrears and contributed to declining revenues for spending on social and economic development needs of the country.
Mwanakatwe further explained that this exercise had earlier been envisaged that it would be completed within the first quarter (January to March 2019) but her complex and delicate nature of this migration had necessitated the need for more time. The time will be used to refine and find time the draft bill that will be subject to further stakeholders engagements.
Lusaka based financial analyst Maambo Hamaundu raised concerns that time was running out for GST implementation. He stated that there is need for government to timely explain the mechanism of how sale tax will be operationalized before it is fully implemented by the business community.
Last year on Friday 28 September, 2018, Finance Minister Margerate Mwanakatwe announced during the 2019 budget presentation that government will abolish Value Added Tax – VAT and replace it with Non-refundable Sales Tax effect on April 1st 2019 which is more likely to help government boost revenue collection and bring down mounting debt.
Haamaundu told the Zambian Business Times – ZBT in an exclusive interview that the level of sensitization on the soon to be introduced Goods and Services Tax – GST should be enhanced to enable the business community prepare adequately for the transition.
The financial analyst said there are no available details in the public domain on how this tax will operate and institutions administering GST such as the Zambia Revenue Authority – ZRA should advice on the rates to be adopted under the sales tax.
