Minister of Finance Margaret Mwanakatwe
Minister of Finance Margaret Mwanakatwe

THE new Sales Tax would enable Government collect enough resources to better its provision of public services, Finance Minister Margaret Mwanakatwe has said.

Ms Mwanakatwe also observed that the new tax regime would promote local revenue collection to support sustainable economic development.

Speaking during the Sales Tax sensitisation and consultation workshop at Royal Solwezi Hotel on May 17, 2019, Ms Mwanakatwe said the decision by government to abolish VAT and replace it with Sales Tax would increase revenue collection for government’s social developmental programmes and further reduce poverty levels.

In a speech read for her by the Director of Budget Office, Joseph Nonde, the minister said that the new tax regime would enable government pay off outstanding VAT refunds and create fiscal space for the nation.

“As you may be aware, our country’s ascendance to a middle income country status has caused the fiscal support we received from our cooperating partners to reduce. There is nee therefore, to review out domestic revenue mobilisation strategies to sustain our development agenda and reduce poverty”, she said.

Ms Mwanakatwe said the new system would address the effects of tax cascading associated with Sales Tax and support exemptions on capital goods, basic food items, essential goods and services in the health, education and water sectors.

“Exemptions on selected inputs into production in priority sectors identified in the revised 7th National Development Plan, namely agriculture, mining and tourism have also been provided to ensure that the cost of production is contained. Given the exemptions provided under the Sales Tax, it is expected that production costs will remain relatively unchanged”, she said.

Ms Mwanakatwe assured that government would pay off all the outstanding legitimate VAT refunds and thanked the business community for its cooperation and patience during the policy development process.

And speaking during the same workshop, Zambia Revenue Authority (ZRA) Domestic Taxes Commissioner, Moses Shuko, explained that Sales Tax would be charged on all taxable goods and services supplied in or imported in the country by a business at every stage in the supply chain.

“Sales Tax is a consumption tax on goods and services which will be charged on taxable goods and services from manufacturing, production, distribution, wholesale and retail. Provisions for exemptions from tax are on capital goods, inputs as prescribed in the exemption schedule, designed basic and essential goods and services, designed supplies to privileged persons and exports,” he said.

He said all suppliers statutory on VAT registration would be automatically registered on Sales Tax adding that that the due date for the last normal VAT return would be the 18th of the month.

North North-Western Province North-Western Chamber of Commerce and Industry (ZACCI) president, Mukumbi Kafuta, said the business environment would benefit from the replacement of VAT with Sales Tax.

He commended ZRA for providing detailed information on the new tax regime.

He implored the Authority to ensure that all the queries and concerns raised by the business community on the new tax regime be addressed

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28 COMMENTS

  1. Rubbish… You have done enough damage to the economy and people’s lives, businesses and well being. I dont know what zmw/$ exchange ratw we’ll wake up to today.. k15/$ ? Just keep quiet, go away.

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    • PF make decisions after drinking down bottles of whisky.
      Sales tax will kill our already struggling companies.
      By the time sugar in a sweet is sold from Nakambala to sweet factory, to wholesaler, to retailer, then the consumer, it’ll be taxed over 80%.
      Another drunk announced ati “govt will run the mines” when they’ve failed to run CBU, failed to pay zampost & times of zambia workers for 6 months.

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    • Lungu must get rid of the useless drunk ASAP for the benefit of the country….jokes and Politics aside…..Mwanakatwe needs to go

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    • Do we really have a President in Zambia…..Mr Lungu please get rid of this chakolwa woman….Ministry of Finance is not a Ministry to foool around with….Please find someone credible to do the Job…..

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  2. And here we are, we thought it’s about refunds…now the truth comes out. Failed to reign in spending. Now taxing people to pay for corrupt and overpriced contracts.

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  3. Look who’s talking folks! The perpetual unmitigated drunken mistress herself, we all must pay attention!

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  4. What service delivery are you talking about ??? The problem we have is not revenue collection in Zambia… It is too many loopholes in your expenditure… When you close the loophole (misappropriation and stealing of funds) Zambia has enough revenue . God is watching you !!!

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  5. Just control wastefulness and pillage of national coffers then there will be enough resources. It’s like your salary is 5pin but your drinks jemasoni for 8pin every month then she seizes you by the balls and claims she wants to squeeze more money out you to meet her budget! It can’t work but that’s what Margaret is proposing to do. Our economy is small, you can’t tax it to success, the solution lies in growing the economy. Zambia is slowly dying as you milk it out of everything to satisfy your insatiable desire to spend. Cabinet traveling expenses were funded at 120% in the last budget but youth empowerment and women programs at 0%. We are in maningi trouble..

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  6. There is nothing left to tax unless you want to tax corpses!
    Your electricity, fuel, taxes, business levies, unstable and unpredictable currency fluctuations, unpredictable policy environment are enough to grind business to a halt!
    Dudu is too drunk to notice that you don’t squeeze milk from stone! PF has killed Zed!!

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  7. I am begining to like Margaret, she is the girl next door and enjoys a pint, seriously think ECL should make her his running mate.

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  8. Sales Tax to increase Govt revenue!! Since you have now taken over the mines where is your sales tax revenue going to come from until you find another investor?? Mind you you will first need to refund the current owners of the mines and the next investor won’t be able to pay any Sales Tax untill they become operational and make sales of the commodities. Depending on how fast the investment transaction takes place you could be looking at over a year or more before you start getting any tax revenue from the mine? Not sure these bunch of drunk criminals thought their action through. God bless leaderless Zambia.

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  9. Madam, if your target group are the mines for introducing the sales tax than work out a 2 way system where all mining activities should be registered with sales tax. The rest of the businesses please leave them with vat as already most businesses are struggling at the moment and with this new tax, the dollar rate and uncertainty a lot of them might close down. Please do a proper study about this.

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  10. Am not sure if you are sober or high…so i tell if what you are saying is sense or nonsense

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  11. The government had 2 options and they have selected one which is yet to be seen if it is the best. Humans will always complain because man naturally tend to find comfort in the status quo hence resisting change. Option 1. The government would have just targeted the drivers of input claims and work around to zero rate and or exempt some raw materials from taxes so as to reduce on the claims. I guess this option was overtaken by the need for more funds. Option 2 is what has been chosen to introduce the sales tax which in itself is not bad for a developing country seeking more funds for development except for the cascading ( Tax on Tax) effects which can be minimized through exemptions just like they should have done in option 1. The bottom line is we have few manufacturing companies to use…

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  12. Hey Drunkie!! In as much as the collection of higher revenue is desirable, y’all drunkards have no idea how to manage national resources. What is more important for Zambia right now is how to utilize the limited State resources!!
    Chakolwa iwee!!

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  13. Republican President -Drunk on Duty.
    Finance Minister – Drunk on Duty.
    Rest of P.F. Government, -Drunk & Corrupt on Duty.
    P. F, & Chakolwa Chagwa, KUYABEBELE!!!

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  14. SINCE SUMAILI ALWAYS LOOKS FOR A REASON TO PRAY, KINDLY CAST OUT THE DEMONS FROM AUNTY DIZZY .

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  15. I do not think the tax is the problem, but the abuse of GRZ funds, even if we collect enough revenue from this tax, it will just misused and we will still be on the same level. We need to be prudent in our expenditure.

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