GOVERNMENT has embarked on reforming the tax regime in Zambia.
Secretary to the Treasury, Fredson Yamba said yesterday that one of the important components for the Government’s growth strategy was to maintain a positive investment climate for potential investors.
Mr Yamba said the Ministry of Finance, Ministry of Commerce, Trade and Industry, Zambia Revenue Authority and Zambia Development Agency started the review of the tax incentives being offered.
He said this during the official opening of a workshop on review of the tax incentives regime in Zambia at Southern Sun Hotel in Lusaka.
He said the key areas for the review would include the tax policy reforms which would focus on designing a broader and more effective investment climate.
The review of the tax would help the Government to implement and communicate clearly a consistent set of policies related to foreign investments.
He said the Government had a desire to re-assess incentive policy to make it more cost-effective and allow it to benefit a number of people.
“While still committed to Foreign Direct Investment (FDI) and an incentive programme, Government has a desire to re-assess incentive policy to make it more cost-effective and allow it to benefit a broader spectrum of the Zambian people,” Mr Yamba said.
He said the Government’s desire was to design a regime that would contribute to Zambia’s wider development objectives.
Mr Yamba said the regime would incorporate the creation of employment, maximising the backward and forward linkages of new investments, and the transfer of skills and technology, especially in priority sectors while mitigating the revenue losses to the treasury.
Commerce, Trade and Industry Permanent Secretary Stephen Mwansa said there was need to diversify the economy so as to improve Zambia’s resilience and broaden the benefits of the growth to a larger section of people.
Mr Mwansa said the main objective of granting tax incentives was to make Zambia a preferred destination for investment, establish an environment for increased industrial growth, promote exports and develop the private sector.
He said tax incentives were for designated priority sectors such as mining, tourism, agriculture and energy, hence the need to broaden the spectrum.
“Zambia today faces the challenge of limited economic diversity; it relies on the mining sector which makes it remain vulnerable to external shocks.
“Diversifying the economy would contribute to improving the country’s resilience and broaden the benefits of growth to a larger proportion of Zambians,” Mr Mwansa said.
[Times of Zambia]