Rural firms want lower sales tax

GOVERNMENT should introduce an extra slot on sales tax which will be lower than nine percent as an incentive for companies investing in rural areas, Kasama Sugar general manager, Derrick Sianga has suggested.

The state has adopted a differentiated sales tax rate of 16 percent on imported finished products and nine percent on locally manufactured products. But Mr Sianga complained that it was unfair that investors in rural areas had been placed in the same category as those in urban areas who had easy access to markets. He was speaking yesterday in Kasama during a stakeholders engagement meeting on sales tax. “We apaying the same sales tax will mean there will be no competition. They will beat us left, right and centre. So we need some sort of advantage and extra incentive and to encourage other businesses to set up in rural areas. That is why we are asking for reduced tax rate,” Mr Sianga said. Mr Sianga said with reduced rate and more companies investing in the area, they would be bringing in more services closer to people. “We made that proposal to have another slot, to take care of rural businesses; rural businesses are facing a hard time with marketing and selling because most of the market is one the Copperbelt and Lusaka. Meanwhile, Mr Sianga said over US$30 million had been invested in the company which had created about 650 jobs. Mr Sianga said the company was targeting to produce about 3800 tonnes of sugar in 2020 from the current 3000. “We took an initiative to set up Kasama sugar in an area where everybody thought was not possible to grow sugar cane. Because of what we are doing is the reason why other companies have come on board,” he said. And Finance Minister, Margaret Mwanakatwe, said Government was willing to lower the rate further because of a higher rate spiked inflation. “Government is willing to consider lowering the rate because the higher the rate, the rise in inflation,” she said.