Newly appointed Minister of Finance Dr. Bwalya Ng’andu has confirmed that the implementation of sales tax is on and that government is currently addressing issues raised from the consultation process. This confirmation follows an earlier hint he gave after he was sworn in as replacement for Magerate Mwanakatwe by President Lungu when he indicated that the timing of implementation would need to be reviewed which led to speculation that the Goods and Services Tax – GST may be scrapped off completely.
Dr. Ng’andu has explained that having finalized countrywide consultations on the switch from Value Added Tax – VAT to Sales Tax , the ministry has taken into consideration concerns raised which include cascading effects due to multiple value chains, the need to avoid loss of employment due to possibilities of value chains dying off , the timing of introducing of the tax and the need to protect manufacturers.
Responding to a question raised by the Zambian Business Times – ZBT during a public briefing the performance of the Zambian economy in the second quarter (Q2) of 2019 on June 17th 2019 in Lusaka, the Minister said concerns raised will be addressed as the process evolves in Parliament.
The added that the Ministry has issued a request for proposals for tax and non-tax measures for consideration in the 2020 national budget and has since appealed to all concerned members of the public to submit their proposals to the Ministry for consideration.
“The Switch from VAT to sales tax is progressing in Parliament as I earlier indicated and the completion of audits for large tax payers particularly in the mining sector is being done. However, Zambia will implement the sales tax provided we analyze issues that have been raised by some stakeholder during the consultation process,” he said.
He further said the implementation of the Land tilling programme will soon result in an increased pace in issuance of land titles as most challenges have now been resolved. Title deeds are essential not only for the social aspect of security property rights, but also for the growth of the property market as well as a key source of revenue through property transfer tax – PPT through the Zambia Revenue Authority.
Meanwhile, giving an update of the performance of local currency, the Kwacha, Dr Ng’andu disclosed that the exchange rate of the Kwacha against major tradable currencies generally depreciated in the second quarter of 2019, relative to the first quarter and that the depreciation was largely on account of elevated demand for foreign currency mostly for the purchase of petroleum products compounded by subdued supply.
He added that the Kwacha depreciated by 7.6% against the US Dollar, trading at an average of K12.83 per US Dollar from K11.96 during the first quarter of 2019 adding that it also depreciated by 6.1%, 6.5% and 4.9% against the British Pound, the Euro and the South African Rand, respectively.
The Minister, who was the erstwhile Bank of Zambia Deputy Governor said government remains committed to continue engaging stakeholders in interactions with regard to growing the country’s economy and come up with solutions to the challenges being faced. There is great expectations from the new Finance Minister as he has moved into office when the economic sentiment is at its lowest ebb.
