Shoppers take selfies with the UPND leader at Cosmopolitan’s Mall in Lusaka over the weekend.

There are those of us who believe in the efficacy of Value Added Tax (VAT) as a fairer consumption tax for logical and technical reasons. When correctly implemented, VAT is likely to have a higher positive impact on the economy and society as a whole.

In particular, the benefit of VAT lies, among others, in its ability to promote savings, capital formation and investment which is essential for economic development, jobs creation, business opportunities, social uplift and poverty reduction.

VAT is a tax whose possible negative effect on low income earners can be mitigated through appropriate tax credits/allowances.

VAT is a tax which is relatively cheaper and easier to collect than some other taxes such as the PF proposed General Sales Tax (GST) .

We advise that PF should drop/not implement their unwise and inappropriate idea of replacing VAT with GST.

As we have argued before, GST is penal, more costly and difficult to collect. Overall, the GST introduction is likely to result in the Treasury collecting less tax revenue to support health, education, food security and other social services.

GST will therefore hurt households, the general citizenry, savings, businesses ( small/medium/large companies which will lead to further business closures and consequently more job losses). Without doubt, GST will slow down even further the already declining economic growth.

PF’s poor leadership has already caused so much damage to our country and people’s lives.

As such and for once, PF should listen to our sound advice for the good of our economy and people.

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40 COMMENTS

  1. The people’s leader has spoken. When HH issues a statement my posts here are very short because there is nothing more I can add to such intelligent and wise statements. As they say wise men dont need to talk to much to make their point. This is a well thought out statement and we hppe that that PF take it on board. Right now my swiss wife and kids are shocked at seeing how the kwacha as depreciated. My swiss wife and I have been sending money to some of our relatives who have had poor crop yields in the village following the late rains. Whislt lungu continues to ignore the plight of farmers in southern and western because they did not vote for him, here we have my swiss woman doing more to help zambians than our fellow zambians. shame

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    • You may agree or disagree with him, but HH argues his case clearly, intelligently and in a well thought out manner. I personally think he is wrong on this one, but atleast he sound more reasoned than other people who only know “kasaka ka ndalama” and other crude, corrupt junk.

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    • Those are some desperate human beings! Who wants to have a selfie on their phone with Delusional Dictators’ face in it?

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    • @ N.E.Z. (New Educated Zambia) the reason why you don’t question what your hh says, it’s because you don’t think for your self. Everything hh says is true gospel. If the same article was written by pf, you’ll be busy insulting and calling lungu as lazy. This is why this country will never develope, because of people like you. Am sure you’re tonda that’s you’re busy supporting anything your hh says without thinking. Shame on people like you.

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    • Hakainde always wants to sound intelligent when unfortunately he is not. The major reason the government wants to abolish VAT is because of the abuse in the VAT refunds, especially by the mines. You have a situation where the input VAT for some mines is ever higher than output VAT resulting in huge refunds. What is your Hakainde’s solution to this issue of large corporations effectively paying zero taxes? The whole article contains zero solutions but only praises for VAT and ridicule for GST.Is it because he is a sponsored mercenary of the foreign exploiters?

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    • musonda it is very disheartening and disappointing that you can accuse people of tribalism without any basis. Please if you do not agree with me agreeing with HH on this point, tell us why? HH has given an explanation which i wholeheartedly agree with.. and this is why I am a member of UPND. so in order to please you and out of fear of being labelled a tribal tonga, should I disagree with HH just to please you? If you feel HH’s points are not feasible then why not give us your reasons for thinkign that way? You need to rememember that before HH issues a statement, we as a party are informed of what his views are on every issues. So this statement that you have just read, has been reviewed by different levels of members in UPND in order to get feeback from the membership. if you dont…

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    • CONTIUNED: understand things please ask rather than throwing accusations. to you every tonga that supports UPND is tribal

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    • Ba Danielle, what do you mean the article has zero solutions? He just told you to maintain VAT. Are you normal?

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    • @Dudelove, is maintaining VAT a solution to VAT refunds? How many times did you attempt your GCE exams..6, 5, 4?

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    • @ N.E.Z. (New Educated Zambia) you have said it all, your agreement with your hh is because you’re upnd. That’s why you’er can never question anything that comes from your leader. If this article came from Lungu you’ll be busy insulting the PF. Am not part or worse enough a upnd but anything that comes from upnd of pf if it of credit l will support it. I don’t support everything from PF if anything am not happy at how they’re running the country but supporting upnd will be deadly because they don’t appreciate anything, even the good thing upnd never agrees

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    • Careful. There is a big difference between Goods and Services Tax (GST) and what GRZ wants to introduce in the nature of Sales Tax (ST). GST has credit system just like VAT while ST does not have but is a simple tax on the consumer. There are several other important differences.

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    • Danielle, young lady, the solution to VAT refunds is to pay them off! At your school they taught you to run off with people’s money??? And after you pay them off, get people with brains to map out a strategy that would put future refunds in check but since we are talking about dull PF that will never happen. Final solution? Kick out this dumb government, thats all.

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  2. VAT does not make sense bo HH.Why should Govnt be refunding Companies money after paying tax?Once tax is paid to Govnt through ZRA,there must be no refunds to individuals or firms-period!!!It is the know it all behaviour about everything which makes HH unpopular in Zambia.HH should avoid politicking on every issue.We are all tired with his nonsense!!We know that all what HH wants is his foreign friends to continue milking mother Zambia millions of dollars in VAT returns.
    Hope the PF Govnt shall ignore evil creatures such as Kainde who only care about protecting the interests of foreigners!!!

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    • says the chap supporting a party that has led to zambia’s worst economic performance since independence. We have had donors ceasing to support zambia due to high corruption levels and theft. We have seen the kwacha depreciate to astronomical levels. Meanwhile their chimbwi with no plan is busy purchasing million dollar jets using money that he has never worked for. HH has given you reasons for why he think VAT is a sensible approach for a developing country like zambian. However, your politically clouded head will not allow you to respond objectively. How can you say that tax is non refundable. if you were overcharged PAYE would you be ok not getting a refund? dont be silly you politcally charged mangoose

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    • @Njimbu,
      If you overpay on your taxes, you have to get a refund. A tax refund is actually your money you overpaid and not free money from government. even with GST, if companies overpay, they will expect their money back in form of a tax refund…

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    • Njimbu encompasses the extremely dull thinking of 99% of PF supporters. Can you actually believe an adult would think that refunds are monies that belong to government?????? My God! Njimbu muntu wandi I will give you a very basic and simple example that even your atom-sized brain can process: when you go to a shop and find an item that costs K50 and then you pay K100 for it, are you entitled to change of K50 or not? Take a few days to think about it coz I doubt you will be able to process it within a day. This is sad OK.

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  3. I have listened to discussions about VAT, it is a shame that the government keeps refunding the investors large amounts of money monthly to companies who claim not to be making any profits .
    These companies are each month getting paid by govt instead of declaring their profits HH must know better how much he is getting from VAT

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    • Now I believe hh is a sponsored gun. He has no heart for this country. He wants the govt to continue paying VAT refunds to his sponsors. OK. Hakaivotela Humwine

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  4. I dont agree with this tribal leader and small god of the Kingdom of SOuthern province based on the following reasons (1). VAT as a tax system does not favor trade based economies like ours. VAT is most appropriate to economies with strong and wide manufacturing base, this is not the case here in Zambaia. There is no value addition to the products as most of them are exported in raw form eg copper, timber, tobacco, maize etc. (2) There is a lot of cheating in VAT refunds by companies, especially mining companies. This has resulted into loss of tax revenue by the government through these refunds. (2) Under sales tax there will be no refunds and the system will help government generate the much needed tax revenue for the development of this country. Even VAT was iniatially opposed at its…

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    • (1). VAT is simply a Value Added Tax, meaning that the value added to goods or services are taxable and that whilst you claim back on your input tax paid. Nothing to do with being a manufacturer or a retailer, you pay tax on value addition, in other words on your profit. (2). Quite correct, no refunds. The sales tax will come from your and my pocket, compounded by the way, because at every level of a business transaction taking place there will be 9% tax, thus from manufacturer, to wholesaler and then on to retailer, sales tax will be charged three times, thus 27%. Think about the impact that will have on your and my pocket, whilst those up there will simply be chewing more, from your and my pockets. Sometimes it’s best not to comment on issues beyond ones comprehension. Rather ask…

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    • Very disappointing SAIMBWENDE. Why allow yourselves to be a trade based country in the first place? Why not add value to raw materials instead of attacking VAT? What you are saying is PF is CNP!

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    • The answer is simple: Under The Generals Sales Tax there will be no refunds and the system will help government generate the much needed tax revenue for the development of this country.

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    • Ghost, if it were that easy and straightforward, 90% of the world would not have abandoned Sales Tax and embraced VAT. The problem with PF is their simplistic thinking to complex things which in the end kills the economy. Bunch of dull dunderheads who never listen to advice.

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  5. This is the man who even while Sata was alive, warned against PF economic policies and predicted the impact they would have in the future. It has come to pass, treasury almost empty, exchange rate haywire and so on. No one listened. Same man now comes to tell you about how unwise this tax is and PF dunderheads are again calling him names same way they did when Sata was still there. Ladies and gentlemen, am I therefore wrong to label PF supporters as mentally ill?

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  6. @Dudelove”,you can call us names but we wont change our position about your tonga god HH.Since you think that HH is alpha and omega,keep your lane and take whatever he says to be the gospel truth.I have told you UPND blind followers time and again that HH simply has a barchelor degree in Economics from UNZA with zero work experience in Govnt or any big company.Mr Mazoka gave him a job on tribal lines after UNZA.Even Dr.Lubinda Haabazoka is far much educated and experienced than your Kainde.SO WHY DO YOU BELIEVE KAINDE’S NONSENSE ALWAYS?Many companies in Zambia cheat Govnt on taxes,hence insisting on VAT.All they want is VAT refunds on monthly basis.Surely,when will we benefit as a country if we keep on refunding HH’s foreign friends?Please go and lecture your cousins in Dundumwezi…

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    • I don’t expect you to change your position mune, that goes against the law of being dull like you guys.

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    • NJIMBU or whatever his name is, is extremely dull. No wonder he thinks being President is to have a Doctorate or Masters like his Russian trained Doctor. Any person who knows what he is talking about will not start praising other people in his discussions, instead he will say things confidently himself. Most of our neighbours are using VAT. Why is it only Zambia that feels cheated by investors? It id lack of discipline that has caused the Govt to owe on VAT refunds.And why only PF have a problem with VAT? NJIMBU, dont blog here to show your ignorance.

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    • You are forgetting that Jona lied that Sata left him the job. Who is there to confirm the job was left to him?

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  7. Njimbu – Are you schooled.? I don’t like to sound sarcastic. But given Njimbu’s thinking I have no option. Do you even have a slight inch of an idea about the differences between Sales Tax and Value Added Tax? Silence is golden. You might think you are supporting PF when you are actually helping them out. Just wait for your sales tax to be implemented and see how it will work against your boss. If you are part of the leaders in PF then this country will land crush going by your level of thinking.

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  8. The solution is not emotional or changing this or that. Government should have addressed the loopholes instead of changing to sales tax. I know this guy Njimbu. Himself is a tribalist to the core. There is a time when he was advising Sean Tembo not to attack his tribesman Lungu because other tribes don’t attack their own.
    Njimbi and Kainde may be the same but may be Kainde is better since he does not talk about tribalism all the time.

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  9. This blog/ media has so many foreign-based Tondas who just thinks like robots no wander it stopped making much SENSE.
    In their minority they think they can win elections by insulting and condemning every out of their line…

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    • you must have some supernatural power to determine the tribe of some one from their online pseudonyms. Have you ever considered a career as a prophet?

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  10. HH is beginning to sound like these fake pastors who know the end game but want to maintain a certain following. He knows too well that with mining concessions and the fact that Zambia exports it’s copper raw without any value addition, his bosses will always be on the winning side in this tax game. Instead of explaining how the country should benefit from the theft we have been subjected to by these mining investors, he decides to side with the perpetrators again. VAT was designed by the people who advise HH. It was designed for matured economies with complete product life cycles. Let’s take British Steel, for instance, they produce top-grade steel which goes to industries such as Defense, Transport, Oil and Gas for value addition.

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  11. Marrubish from HH. We know he is speaking for his fellow criminals who exploit the Zambian money. These guys get free money from GRZ in the name of VAT refund claims. Their claims are false as ZRA does not have the capacity to authenticate each claim. Please GRZ go ahead and introduce the Sales Tax. Don’t Listen to this man who is ever bent on exploiting the poor people,

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  12. The problem is not with VAT, but has been the lack of monitoring by ZRA. If they had been undertaking regular audits, they would have discovered the fraud by the mines of inflating expenditure which has led to unnecessary refunds,but again the back stops with Lungu. Since Lungu wormed his way to power ,he
    has been in campaign mode and does not have time to sit down and reflect on his leadership.

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