Manufacturers want more incentives

MORE relief needs to be provided to manufacturers to stimulate a sector that has been significantly affected by the economic woes of 2019 and the current devastating Covid-19 pandemic.

This has resulted in negative growth for the sector during

2020, says Zambia Association of Manufacturers (ZAM) Chief Executive Officer, Florence Muleya.

Ms Muleya said Government should specifically incentivise production capabilities and supplier development for the manufacturing sector to grow.

“ZAM urges the government to reduce the manufacturing

CIT rate from 35 percent to 25 percent. Increase the period requirement for presenting proof of exportation from three to four months.

“Reinstate the implied duty rates under the Duty Draw-Back Scheme,” she said in her write up on Unveiled 2021 Budget: Unsustainable for Manufacturing.

Ms Muleya said some other pronouncements made in the 2021 Budget would harm the manufacturing sector.

She said the measures included the introduction of an excise duty on reconstituted milk of K1.5, the introduction of a surtax at the rate of 20 percent on imported un-denatured ethyl alcohol and the introduction of excise duty on plastic flat bags at the rate of 30 percent.

Ms Muleya said, the measures would serve to directly increase the cost of doing business in the manufacturing sub-sectors.

“Government should remove these measures and seek audience with affected industries. The plea arises because the manufacturing sector still faces structural issues that require policy interventions to grow,” Ms Muleya said.

She said Covid-19 had exposed delinked value chains in the country that suppressed local content growth.

She observed that specific measures aimed at promoting economic recovery to boost manufacturing especially the distressed subsectors were missing from the 2021 national budget.

“Factors including the closure of the tourism sector, constrained supply chain movements and slowed down economic activity combined, have impacted negatively on the manufacturing sector,” Ms Muleya said.