Economics Association of Zambia President Lubinda Haabazoka says there is need to defer sales tax to 2020.
Dr Haabazoka has since proposed that in the meantime, government should zero rate domestic Value Added Tax for legal entities but keep import Value Added Tax.
He has however proposed that Import VAT refunds should be suspended.
He said this move will seal the leakages but maintain revenue collected from through VAT thereby meeting the budget targets.
“We should do everything possible to ensure that the Kwacha does not trade at k13 per dollar. On Friday the green back was trading at k12.5 per dollar from k12.1 on Wednesday. Ideally the Kwacha gains from April as mining companies scale up production, the agriculture sector exports their harvest among other factors,” he observed.
He added, “To avoid further speculation and adverse effects, it is advised that the difference between the Bid and Ask price should be above k0.5. This will stop players from speculating. We also need to boost our foreign exchange reserves by engaging businesses to help bring their foreign reserves into the country.”
Dr Haabazoka who is also Head of the UNZA Graduate Business School said the extractive industry should also be encouraged through the fiscal policy and other incentives to make Zambian banks primary holders of proceeds from the sale of mineral resources.
“There is also need to immediately restructure debt so as to make cash outflows match cash inflows. Infact there should be cash inflow out flow matching to insure that negative gaps are identified are treat to avoid liquidity problems. The formula that can be used at national level should resemble that done by commercial banks,” Dr Haabazoka said.