Government reverses its decision to replace the Value Added Tax with the Sales Tax

ZRA Headquarters
ZRA Headquarters
ZRA Headquarters
ZRA Headquarters

Government has reversed its decision to replace the Value Added Tax with the Sales Tax in the 2020 National Budget.

In the 2019 Budget Address, Government proposed to abolish Value Added Tax and replace it with Sales Tax which was widely rejected by the business community and other stakeholders.

A number of concerns were raised by various stakeholders, which included the cascading effect, negative impact on GDP growth and job losses through elimination of intermediaries in the supply chain.

Announcing the 2020 National Budget, Finance Minister Bwalya Ng’andu said based on the consultations undertaken countrywide, Government has decided to maintain the Value Added Tax, but address the compliance and administrative challenges.

Dr Ng’andu said he therefore intends to introduce administrative measures to strengthen enforcement and efficiency of VAT.

He said these measures will include Upgrading the Tax online system for domestic taxes and interface it with customs system to ensure that all claims of refund for import VAT paid to Customs Services during import of goods are validated through systems based controls against data in the customs system; Make it mandatory to use

Electronic Fiscal Devices for VAT and other tax types and facilitate accreditation of Additional EFD distributors and Virtual EFD software suppliers.

Dr Ng’andu said other measures will include limiting input VAT claims by mining companies on diesel to 70 percent from 90 percent; and limiting input VAT claims by mining companies on electricity to 80 percent from 100 percent.

He has further proposed to Zero rate capital equipment and machinery for the mining sector, standard rate ancillary services that are directly linked to the transit of goods through Zambia and Dis-allow claims of VAT on consumables such as stationery, lubricants and spare parts.

Dr Ng’andu said this measure will not apply to businesses for which these consumables are stock in trade.

Meanwhile, Dr Ng’andu has proposed to introduce duty at 10 percent on specified capital equipment and machinery imported by mining companies which are currently duty free or attract 5 percent to raise revenue for the Government and discourage transfer pricing.

He said in order to promote local production of Flexible Intermediate Bulk

Containers and create jobs, he proposed to impose a surtax at the rate of 5 percent on these containers.

Dr Ng’andu has also increased the specific excise duty rate on cigarettes from K240 per mille to K265 per mille further proposing to revise upwards, to cost reflective levels, various fees and fines charged by Government departments effective January 2020.


  1. The minister is reasonable. Where is Sunday Chanda, Antonio Mwanza and the Russian trained economist now? PF kuyabebele. Playing chipante pante with people’s lives.

  2. The minister is reasonable. Where is Sunday Chanda, Antonio Mwanza and the Russian trained economist now? PF kuyabebele. Playing chipante pante with people’s lives.

    • @ Matumbo if I recall as the pro’s and con’s of introducing sales tax were discussed among the many who participated with their views, it’s HH who was vilified by those in the ruling party. It is easy to remember the stream of invectives and who they were aimed at than the unaffected! Maybe thats where referencing HH comes from.

  3. So how much monthly does this translate to in VAT refunds. Let’s talk impact, multinational companies have had hundreds of years experience in dodging taxes. We should adopt what Nigeria has implemented, no waiting for profits we as a country just keep 50% of what is mined and we sell it ourselves. As it is net net we get nothing from the mines but holes. Disappointed in The New MOF, we needed someone with a backbone to make bold decisions. Maybe it’s time to give Habaazoka a Chance. He has progressive ideas

  4. I wish I was born in Zimbabwe. A country without a currency is better than one with 8 hours loadshedding and no money in the bank

  5. when the legal president of zambia his excellency HH was telling you to do this. you called him names. but here we are you are now doing as he said. Now we will watch you copy his budget. PF is a party of very empty tins. very dull. Even their bloggers here leave a lot to be desired. they are vulgar and lack any common sense. How did we as a country end up with such rifraffs ruling such a promising country?

  6. forgot to tell you, me and my white wife are going out for a meal with another couple. they are both white and we enjoy their company very much. it is hard to find good friends as you get older and richer. But these two are also very sucessful and we feel we share a lot of things in common. especially our taste for the finer things in life.

    • It looks like HH should join PF and
      Advise on every thing that government decides.let him be the
      Chief adviser.whatever he says is
      Slowly brought back.

    • Kiki iwe mwaiche how do you know about such things. You have to be very secure to do such things. Surprisingly my white wife is one who is very jealous about me and other women. So we would never do such. Mwaiche twalisungapo ifwe big powerful katundu

  7. This HH stuff is as boring and as nauseating as Sunday Chanda.

    Especially that from trible baggage, now he has also accumulated a lesbian and gay baggage tag.

  8. Please Kampyomho confirm that HH passport is stamped exit Zambia and enter Italy, That is enough for us, whether he returned or stayed in gayland forever is irrelevant and actually preferable.

    • Boring propaganda. You have failed to respond to constructive criticism so you now resort to homophobic politicking. This is not Uganda. Grow up

  9. Somewhat disappointed the budget is silent on import duty on foreign ore/concentrates. However, the budget acknowledges that sulphur acid export was among the contributors to the revenues.
    Import duty should also be abolished to allow miners such as Chambishi Metals and Chambishi Copper Smelter to fill operation capacity. This will increase sulphuric acid production and maintain or further jobs. I mention the two mining companies because they do no not have captive ore resources and rely on toll treatment. Import duty should be maintained or even increased for other mining companies with underground or open pits such as KCM, FQM and Mopani. This should compel these mining companies to develop and mine their ore resources.
    Further, a statute should be enforced where by miners without…

  10. … refinery facilities such as Lubambe, Lumwana and Chibuluma should only tram their concentrates to Chambishi Copper Smelter or Chambishi Metals. This would simplify auditing/traceability.

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