Former Finance Minister Felix Mutati has called for another deferment to the implementation of the sales tax regime to allow for a detailed economic impact assessment and address the administrative issues of the value added tax-vat regime.
Speaking before a Parliamentary Budget Committee on Thursday in his capacity as Global Ambassador for ACCA, Mr.Mutati said going ahead with the implementation of the sales tax will negatively affect the business community especially local distributors.
Mr. Mutati who is also Faction Leader of the Movement for Multiparty Leader is of the view that introducing a new tax will not resolve the issue of tax refunds for the Zambia Revenue Authority.
He further submitted that the Sales Tax has a limited audit trail throughout the supply chain as compared to the value added tax which has a self-enforcing mechanism.
The Sales Tax Bill of 2019 has a number of objectives, which include the introduction of a sales tax on the supply of goods by manufacturers, producers, distributors, wholesalers and retailers and the importers of goods into the country.
The proposed Sales Tax aims at putting a stop to the escalation of VAT refunds, dating back to 2009, and estimated at a cost K17.9 billion as at January 9th, 2019.
The objective of the Bill is to revise the turnover tax threshold from eight hundred thousand Kwacha (K800, 000) per annum to five hundred thousand Kwacha (K500, 000) in order to harmonize it with the Sales Tax threshold.
Mmmmh! Ba Mutati, you have a conflict of interest when it comes to VAT and the Mines, sir.
Sales tax should apply… only to the mines
Poor Failures.
Don’t listen to him….he is speaking like a person who has huge interests in mines…the guys who get free money through VAT refunds. Just go ahead and implement the sales tax.
Anyone who is against sales tax should be ignored as they are exhibiting a high level of ignorance
No more being offered in Indian, Chinese and Lebanese shop and other entities that if you don’t want a receipt, I won’t charge VAT. But the beneficiaries and the corrupt want to portray VAT as flawless. VAT out. Can’t have a sizeable economy where players demand good infra-structure, subsidised electricity and good social services but refuse to pay just share of tax.
In fact, backdate sales tax to last year!!
Please explain to me why we have to refund (vat ) and we should deduct in the first place if we to refund in the end. I remember how we used to chase for refunds at my mine.
The usual PF cadres a proper analysis has not been conducted this sales tax policy should have been implemented in phases am no accountant but I know you don’t just change your taxation system overnight it needs carefull analysis or risk setting up something worser than the one you had and secondly you need money to implement the new taxation system at this point in our economy it would have been better to just arrest all the loopholes in our current taxation system then seek to introduce a new system when we are well prepared to do so