Govt lauded for deferring Sales Tax

AN economist has praised Government for differing the implementation of the proposed Sales Tax as it would likely affect the private sector negatively.

Mr Yusuf Dodia said it was prudent that the Minister of Finance Dr Bwalya Ng’andu deffered implementation of the new tax regime for further consultation as it had serious implications for the private sector.

He said in an interview in Lusaka yesterday the replacement of the Value

Added Tax with Sales

Tax would drastically increase the cost of doing business for the private sector.

Mr Dodia said the proposed Sales Tax if implemented would drastically increase the cost of goods and products and everyone in the value chain would have to pay tax on it. “If the product is imported you pay 16 percent tax and once that product changes hands from the importer to the distributer, to the wholesaler, to the retailer and eventually to the consumer, you find that everyone in that value chain will pay about nine percent tax,” he said.

“It means that the product which was K100 at import would probably cost K200 by the time it reaches the consumer, meaning the cost of doing business will just shoot up extensively,” he said.

“This makes the business industry very uncompetitive, these are the challenges which Government has recognised which need to be discussed,” he said.

Mr Dodia said the deferment would allow for effective and critical consideration of the proposed tax and come up with a lasting solution.

Dr Ng’andu on Friday told Parliament that the proposed the Sales Tax would only be implemented in January, 2020 to give room for further refinement.

Dr. Ng'andu moved a motion to withdraw Sales Tax Bill (N.A.B Number 7 of 2019) from the current sitting of Parliament and the bill would now be reintroduced during the Budget Session of Parliament.

Addressing the House, Dr. Ng’andu said the Sales Tax Bill will be reintroduced during the Budget sitting starting next month in 2019, in readiness for its implementation in January,

2020.