ANNOUNCEMENT OF DTS WILL INCREASE COST OF DOING BUSINESS
GOVERNMENT’ S announcement to implement Digital Tax Stamps (DTS) has had a low buy in from industry players as it has been viewed as an extra cost on production, thereby increasing the cost of doing business.
The affected sectors such as the alcoholic, non-alcoholic and tobacco sectors have echoed mixed sentiments on the implementation of DTS as industry feels that solutions to curb illicit trade must be sector specific, as opposed to a one jacket fits all.
This is according to the Zambia Association of Manufacturers (ZAM) Policy Officer, Kawama Tatenda Banda in her write up on “Digital Tax Stamps: Through the Lens of the Manufacturers.”
According to Ms Banda, the local industry had expressed concern around the procurement of new machinery and technology required to accommodate DTS on the packaging of products.
“Most manufacturers’ product packaging is not designed to accommodate DTS. Therefore, investment in packaging and labelling are required to adapt to the new designs required for compliance purposes.
“Following the introduction of new packaging, heavy investment in marketing and education on the new product is required, otherwise, consumers may not recognise the product hence substitute the local products for imports that are seemingly familiar,” she said.
Ms Banda pointed out that to adapt to current technologies, some companies already took the initiative to implement internal systems that were effective in the fight against illicit trade.
Therefore, she explained, the introduction of DTS could lead to a duplication of efforts and contribute to the already prevailing high cost of doing business in Zambia.
“An increase in the cost of doing business leads to an increase in production which is passed down to the end use consumer through an increase in price of the final product.
“For sound policy implementation, it is imperative that Government is made aware of the potential challenges that might arise from the implementation of DTS which has the potential to negatively alter the business environment in Zambia,” Ms Banda said.