Sales tax debates elate ZRA

THE Zambia Revenue Authority (ZRA) says it has received overwhelming responses from the public on the modalities of implementing the Sales Tax announced by the Finance Minister in the 2019 national budget.

Acting Commissioner General Brigitte Muyenga yesterday said since the announcement of the budget on September 28, 2018, stakeholders have been invited to give comments and suggestions to the Ministry of Finance on the execution of the 2019 budget. Ms. Muyenga said ZRA was taking all concerns and comments raised to the parent ministry so that all Zambians could have an input in the economic governance of the country. “The authority is in full support of sales tax and the idea was originated by the authority to migrate from VAT to sales tax which will definitely be lower than VAT and benefit the ordinary Zambian citizens by paying a lower tax than the current VAT. “Sales tax will also help broaden the tax base and increase revenue contributions by all sectors and individuals in the entire value chain,” Ms. Muyenga said. She said ZRA did a detailed analysis and went to suggest to the Ministry of Finance that Zambia should migrate from Value Added Tax (VAT) to Sales Tax due to weaknesses and complications in its administration. She said the authority believes that sales tax will create a steady cash flow for both the business community and Government unlike the case of VAT refunds where business entities had to wait for a refund in order to consistently operate. She said under sales tax, ZRA wanted to provide a solution to the country’s consumption tax system which will reduce on frauds and stop pricing malpractice related to VAT. The 2019 budget saw the re-introduction of Sales tax to replace the Value Added Tax (VAT) as proposed by the Zambia Revenue Authority. Finance Minister Margaret Mwanakatwe has said that the ministry would soon constitute a Tax Policy Review Committee to address all concerns in the budget as well as work on the modalities of the sales tax.