Tax on raw tobacco will have negative impact, State told

By MAILESI BANDA THE proposed increase in the customs duty on unmanufactured tobacco from 15 percent to 25 percent in the 2018 national budget will negatively affect the lives of most tobacco farmers, Price Waterhouse Coopers tax partner Jyoti Misty, has observed.

Ms. Misty suggested that the proposal be looked at critically before it suffocated the tobacco industry, which provides a source of livelihood for most rural communities and could employ over two million people once supported.

The Minister of Finance, Mr Felix Mutati, in his 2018 budget presentation proposed an increase in the customs duty on unmanufactured tobacco and tobacco refuse to 25 percent from 15 percent. He said this would harmonise the tax treatment with all other types of tobacco which was currently attracting a customs duty of 25 percent.

Meanwhile, British America Tobacco, managing director, Godfrey Machanzi expressed excitement at the budget, saying the agriculture sector was receiving support and that the tobacco industry would be enhanced by the policy direction stipulated.

Mr. Machanzi explained that the tobacco sector was the only sector that could contribute to all the five pillars in a significant way.

He said this was being achieved in neighbouring countries where the sector had created over two million jobs as part of the first pillar that looked at economic diversification and job creation.

“A diversified and inclusive economy will ensure long term stability and prosperity for Zambia.

Mr. Machanzi added that the specific measures put in place to regularise the VAT, and duties for tobacco products are greatly appreciated as they will allow for the Zambian tobacco sector to compete with other countries in Southern Africa,” he said.