‘Implement sales tax now’

GOVERNMENT should not postpone the implementation of proposed sales tax anymore because Zambia is in need of money to revamp the economy, former minister of Finance Katele Kalumba has advised.

Dr Kalumba said sales tax was the only source revenue that would revamp the economy.

He said Government must not heed to advice from some sections of society who want it deferred.

Dr Kalumba said in an interview yesterday the government should ensure that the proposed tax was effected by July 1, 2019 without fail.

He said Zambia’s economy needed to be revamped hence needed to ensure that programmes aimed at improving it were implemented.

“Government postponed the sales tax because some business entities said they were not ready. Now that they have been given enough time to study and understand the new tax regime it should be implemented.

“Some of us we did ask Government to do that, and we have seen some sensitisation on the matter. I think they have understood the changes from VAT [value added tax] to sales.

“Government needs revenue and sales tax is one of the most important ways to generate revenue to increase from what it has now,” Dr Kalumba said.

He said VAT was refundable tax. Therefore, Government was losing a lot of revenue.

“The whole business of running a government cannot be done without taxation,” Dr Kalumba said.

He said sales tax was not aimed at over-taxing the business community but driven by a need for Government to raise revenue.

Dr Kalumba said “the only way to move out of the potential dangers of a financial crisis is to look to other revenue sources”.

He said there was need to use aggressive ways to secure revenue, especially from the informal and private sectors, to improve the economy.

“People cannot come to conduct business in the country and fail to pay a small amount of money through tax,” he said.

In the 2019 budget Minister of Finance Margaret Mwanakatwe proposed to replace VAT with sales tax.

The business community is nervous of the new regime and has asked Government to defer the implementation of sales tax.