Economics Association of Zambia President Lubinda Habaazoka has charged that some “experts” were paid huge sums of money to organize and lobby for the retention of Value Added Tax in the 2020 national budget.
Reacting to the decision by Finance Minister Bwalya Ng’andu to scrap off Goods and Services Tax and retain VAT in the 2020 national budget, Dr Habaazoka said Zambia has again lost out to mining houses.
He said with VAT refund arrears in the excess of $600 million, the only people smiling their way to the bank are “Consultants” that were handsomely paid to de-campaign GST.
“The Zambian has lost a chance to fix the problem with companies using fake VAT refunds as working capital. The Zambian government has indeed a huge tax ahead to fund public expenditure and also provide working capital to companies through the so called VAT refunds,” Dr Habaazoka said.
“Ordinary citizens meanwhile shall continue paying high taxes with no hope of reduction as mine owners and their hired guns celebrate yet another victory.”
He added, “This time, citizens can’t blame government on the GST decision because its pressure from citizens and the opposition forces themselves after being convinced by paid consultants that also led to this.”
“As you breathe in center in Mufulira don’t forget that air in Switzerland is very clean and that investments in the health sector, education sector and other sectors is booming because of your minerals. All this is your own making with your destructive debates.”
“The past week I have been tagged in posts about the retention of VAT with people celebrating and shaming me and others that supported GST. This year I witnessed a lot of workshops sponsored by the private sector lobbying for VAT. “Experts” were paid huge sums of money to organize and lobby for VAT.”
He said, “In the beginning, we expressed concern over the rate of GST and GRZ succumbed and put it about 5%. To citizens that are celebrating, find time to sit down with BOZ, ZRA and learn about the huge irregular VAT refunds. Sit down and look at the benefits of having a mining industry. It’s not that we own the mines or the country alone. It’s co-owned by everyone.”
Dr Habaazoka said with a faulty consumption tax system, Zambia can kiss good bye to lower pay as you earn adding that workers shall forever pay the highest taxes because workers have no capital allowances, no deductions on household expenditure or VAT refunds.
“When you laugh at others, you laugh at yourselves because business funded your own citizens put push a strong voice against GST and eventually mislead you. Just notice how certain consultants were so emotional and hardly fought GST but these people don’t even own a single company.”
“We are very good at failing our own country. It’s not that we were going to be exempted from paying GST. I have been to India and the USA this year and I haven’t seen any cascading effect in their economies.”
He added, “Every time you see copper trucks going out, just know that you continue being milked. These guys all of a sudden have low grade copper and don’t even want to talk about cobalt. When we speak for you, you call us all sorts of names. Don’t come back to us when your mines are dry for more ways of diversifying the economy. You have missed your chance now.”
Dr Habaazoka charged that the rescinding of GST decision is because of citizens pressure and pressure from businesses.
“When your tax authority tells you that something is wrong and you opt to think you are more knowledgeable, something is very wrong. Sit down with us people who are in economic advocacy. We shall show you how lobbying in Zambia is very much advanced. The first bribe given to Zambians is given to intellectuals in form of consultancy. After chewing consultancy money, the voice from the consultant will go flat out in support of certain interests. Indeed it Business 10 – Zambia 0.”
Seems to imply the Finance Minister received a gratification to discard the Sales Tax implementation and retain the VAT system. He sounds emotional that his proposed recommendation was not carried through. He sounds like a third party in this Zambian scenario and won’t be affected by the VAT negatives somehow.
If only he had played straight economics and not cadre economics perhaps his recommendations would have carried the day. Just thinking.
I am with Habaazoka on this and I said it on another post that reversing the Sales Tax Bill is the most cowardice this administration has done so far.
I also think that N’gandu totally erred in fact and principle by succumbing to this reversal … the working capital refunds are what all these crooks keep in circulation while externalizng all revenues and how do you develop like that??
On top of it, you have refunds solely based on fraud and corruption. This whole reversal is a sham and I believe kick backs go all the way to N’gandu in some form or shape.
Let’s them laugh Habaazoka, they called KK Fonko and he just laughed them off saying Mu Ka Fonka Pamala and he was right.
This is a wrong move and I am sure that post the next election, this shall be revisited somehow…
It’s a matter of doing the sums here. We are an independent republic and can hire our own technocrats to examine the issue scientifically to everyone’ s satisfaction. Denigrating others isn’t a policy although it makes others feel good about themselves after wht they see as scoring some points against the “bastards”. I refrain from taking a position because I hv no access to the figures.
HAABAZOKA IS NOT A HAPPY MAN WITH THIS, BELIEVE ME
He seems to be making alot of sense especially when he brings in the Mines in the story.
I know that Japan uses sales tax. Schooled in Russia, maybe Russia uses Sales Tax as well thats why he is so passionate about it. This bull makes alot of sense when he talks. I wish he was the POTROZ. I love people who have the passion for the once upon a time our Mines. But was Lubinda’s Sales tax proposition aimed at getting at the Mines alone? No, I think this guy is a patriot.
But folks will tell you, Lubinda, that the Devil (VAT) you know is better that an Angel (SALES TAX) you don’t know. Don’t give up though, Mines gotta pay!
SOME COUNTRIES USING GST WITH FIGURES
1. France
There are 4 rates of VAT in France: 2.1 per cent, 5.5 per cent, 10 per cent and 20 per cent since its first implementation in 1954
2. United Kingdom
Since 2011, UK’s VAT is set at 20 per cent
3. Ukraine
There are two VAT slabs in Ukraine, which are 20 per cent for most goods and services and 7 per cent mostly for medicines
4. New Zealand
GST was introduced in New Zealand in 1986 at a rate of 10 per cent which was later increased to 15 per cent in 2010
5. Australia
Introduced in 2000, the rate has been set at 10 per cent
6. Vietnam
Three VAT rates of 0 per cent, 5 per cent and 10 per cent are applied to most goods and services in Vietnam unless stated otherwise
7. Singapore
Implemented at 3 per cent in 1994, GST was…
…increased to 7 per cent in 2007
8. Malaysia
Introduced in 2015, Malaysia’s GST is set at 6 per cent
9. Canada
GST is set at 5 per cent on supplies of goods or services and includes most products. In some provinces of Canada, a Harmonised Sales Tax of 15 per cent is also charged.
So as this was being reversed in Parliament, all walkout party members cheered. Snake is the grass
Bwalya Ng’andu is not an economist. He cannot withstand pressure from the mines. He probably received black envelopes
@ 1.4/5
Your “research” (LOL) is a mirror image of your self.
Proposed introduction of GST in Zambia has NOTHING in common with GST in Singapore, Malaysia or Australia.
Instead of spewing inbreed ignorance and be proud of it, inform yourself before commenting.
“Consultants” are always thieves! Please never give chance to any person you think is or was a “Consultant!” They are professional (“white collar”) thieves.
So ECZ seems to suggested oiling the hands of some people can win you an argument. That’s what is going on there. Sorry sir, you just exposed yourself and your clones. Sad that’s how you deal with national issues.
Habazoka is a Patriotic Zambian. We have given in to evil pressure. Some Politicians running big business are smiling.
I hate it when politicians will always look at issues with political reward lenses instead of what benefits our motherland.
When FTJ’s MMD was senselessly employing in parastatals to unreasonably satsify his political agenda even when it was clear that workforces were bloated.
When FTJ’s MMD paralyzed the City of Ndola for an unreasonable quick fix economic recovery maneuver instigated by the IMF & WB.
When FTJ’s MMD consortium with H² put us in this position where we have to grapple with taxes from our former asserts.
When reasonable fellaz like Haabazoka has to lament this way when H²’s FQM is smilling.
If only CK was this smart, 2026 would have been a workover for him seeing that 2021 is impeccably reserved POTROZ ECL with his share of manageable mistakes.
One day LUBINDA HAABAZOKA should turn politician. We will rock and roll with him not these tuma selfish double h.
Thank you Mr. Haabazoka.
Meant to say Dr. Haabazoka.
Dr Haabazoka is right…ZRA recommended the GST however now the mines are the beneficiaries including bootlickers such as the Chamber of mines…
Finance Minister is not Ng’andu Magande. Edit
I take it that as a strong advocate of sales tax it actually cost Mwanakatwe her job. With this government anything is possible. The main beneficiaries of VAT must have bribed the powers-that-be to retain VAT or that they will be receiving a cut from the VAT refunds. Cry my beloved Zambia!
I totally agree with you … this N’gandu fella is a sell out. I don’t like what I see already.
Margaret was immovable on this and it costed her her job. This N’gandu fella is the appeaser-in-chief. From preparing an election budget to please everyone to reversing fundamentals.
Leadership is about making tough decisions despite the fallout now but believing in the better good for all involved.
I am lost for words, sad!!! Very sad indeed … epo mpelele,
BRM
This man is an embarrassment to humanity and a living proof that not every educated person has senses.
Haabazoka is extremely smarter than the likes of h² economically, politically and patriotically.
@ Thorn in the flesh….Why are you comparing Habazoka to HH? HH is not in power and did not come up with this budget. Compare him with Lungu or Bwalya Nga’ndu but not HH. It has become so fashionable to dunderheads like you to bring HH in everything you do or say. Some how you think it makes you look smarter. Reality is that it makes you look so *****ic.
It’s a patriotism yardstick.
The upndead wants everything to fail.
They liked it when the announcement on return to VAT was made.
Don’t you get it?
Panama papers bedfellows pushes the agenda of exploitation of poor countries where their mining activities are carried out.
Why are you worked out? Huh?
Double h is all-over this.
I hate unpatriotic niggaz.
I am saying h², you’re stup1dly on point saying HH. What have been smoking?
What have you been smoking? When Haabazaka says qoute, “This time, citizens can’t blame government on the GST decision because its pressure from citizens and the opposition forces themselves after being convinced by paid consultants that also led to this,” what does your filthy head figure out?
Problem is that you’re so d.u.l.l under the guise of blind support.
Uleisba utuntu nigga iwe.
What do you know?
GST is practiced in two of the most advanced economies namely USA and Canada. That’s why they have money to even give NGOs. They have economies with alot of job opportunities. If we sincerely want development those are countries to copy from. UK has economic problems hence Brexit. You can hate or disregard Habazoka but is GST advocacy for Zambia is patriotic. The current Finance Minister does not inspire.
Habanjoka and his Habaazoconomics.
Just a bleddy fckn party cadre, he probably thought he would be appointed Finance Minister and not Dr Ng’andu. Thank God H.E. Edgar did not fall for the tricks of this puff adder in the grass.
I hear he was promised a job as Finance Minister, Ithink his a bitter man
Comment: From this news article, I deduce that Zambia has a high-likelihood risk to continue exporting copper as fraudulent low grade resulting in significant understatement of Output VAT through export sales against significant Transfer Pricing Fraud Risk of both capital & revenue expenditure as purchases or cost of production overstated Input VAT resulting in VAT Refunds being claimed from ZRA. Procurement is highly prone to price overstatement risks. Has this not been the driving ripple-effect risk causing annual losses in the mining sector resulting in no payment of corporate taxes? We’re significantly exposed to this VAT Refund Fraud Risk. To my fellow internal auditors & other stakeholders, be alert and detect this risk – it’s Zambia’s Economy Top-most Risks. It’s hoped the VAT…
He has his opinion and let’s respect that. However, his allegations without proven facts is not right from the president of EAZ. VAT is a very simple system to manage and transparent compared to GST. Trouble is VAT has not been managed well. Abolishing VAT was not going to wipe out refund arrears. All we need to do is put mechanisms to manage VAT revenue pot well and manage expenditure. Currently we just spend and spend even when we don’t have money to spend. I salute Bwalya N’gandu for keeping VAT. This is my opinion.
Bwana, its over 20 years now since vat was introduced. When are you going to seal the loopholes? We know the solutions to our problems but we have no determination to take action. This is exactly what happened to the IS that would have sorted out financial leakages associated with imports. Just like Mr Chikwanda , Mr Bwalya Ngandu has bowed to businesses interest instead of thinking of future generations. What percentage is vat to our tax collections?
Fix leakages in VAT. That was the logic with the VAT supporters. There was no need to run away from fire. It was a matter of fire extinguisher. Remember, fraud, corrupt and tax evasion were the source of distortions. Address these sources of distortion professionally. This included capacity building. This included rewarding competent. This included rewarding efficient. This included eliminating wastage of resources at ZRA. Those who were hired to manage the software must not blame the same software that was tested and confirmed in the EU and in the SADC.
Amazoka is correct… Zambians are so gullible people, a people who lack economic analysis capacity and are just interested in kick backs. What a lost opportunity!!!! I am also really pissed off. Who bewitched you Zambians???
I agree 100 percent with HABAZOKa for once
Running VAT is simple and has one main rule.
“DO NOT SPEND MONEY YOU DON’T HAVE.
The problem with the PF is that once ZRA collects input VAT at a the border,they immediately want to spend the money.Ideally the VAT collected should be held by the treasury until the monthly VAT returns are dealt with.
THATS WHY THE VAT ARREARS ARE HUGE.
Believe me we were not ready for Sales Tax. There was need to properly curb the cascading effects it was to come with. Am sure an integration of Tax online and Asycuda World to verify the legitimacy of import claims is the best move. Let us learn to fix problems one at a time. This issue of wanting to reinvent the wheel will kills us. Bravo Ngandu for protecting the middleman who would have cried the loudest with GST.
Accusing someone of receiving gratification/ bribe without evidence constitutes defamation
You mean Bwalya Ng’andu doesn’t know that VAT refunds are fake? Then he should not be the finance minister
You useless supporters of VAT with you Bwalya N’gandu can you fast sort out those VAT leakages, coz we can’t continue losing our money on false claims and over declarations. Corruption of the worst kind.
Habazooka is right in this I was so disappointed with Dr Ngandu. As it is the mines are the biggest users of electricity and even this is subsidized, they declare little to no profit and so get away without paying Tax because Tax is paid on profit. To make matters worse we end up refunding them a Tax. The new Man is a sellout that makes why I think he has deputized for most of his career. Magande was successful because he had a backbone
Personally I find the argument by Habazoka (one who keeps snakes)’s argument and those who support him facetious and disingenuous. His lamentation that “you can’t blame the government” seems to have gotten some folks out of the woods to support him. Folks just admit that your government for which you gyrated your waists to the tune Dununa reverse has made so many reversals and flip-flops on many critical decisions. Please for once have the moral decency and admit you were wrong. Don’t come here to attempt to convince us that your whipping boy H2 as some of you refer to HH was responsible for this latest reversal. The buck stops with the guy at state house and the sycophants he works with. Attempts to pass the buck smack of mental disequilibrium.
I’m no economist but can spot chipantepante with a clueless blind leading the nation.
It is alarmingly sad to see very high levels of ignorance even from the so called ”learned” or is it just ”educated” people, representing high profile organisations, displaying their lack of knowledge on the difference between VAT and Sales Tax. If you don’t know, it is better to ask from those who have a sound knowledge/skills on that particular matter. It is also wrong to accuse other people of receiving inducement, without evidence, simply because your myopic views were not considered. It is not too late for those still in doubt to go for tax lessons and understand the difference on the mechanisms between the two tax types and speak with facts.
GST sitenzokana… it was that idea that we could escape nkongole za wantu by introducing GST. It is like legalizing Ministers overstaying in office so that we can erase a boob somewhere. Mwaona ka? Don’t be expedient with devious motives. VAT as it is has mechanisms that can be deployed to stem abuse and avoid fraud. Awe mwe…
Sounds like time for more lamentations from my beloved country. It’s certainly no time for pop corns but perhaps to gaze at the stars. Are they still standing firm?
The tens of millions of dollars being paid back as VAT refunds to the mines could have been used to mitigate any impact of loss of jobs in the mines and also expand on social welfare programs like Social cash. Zambia has clearly lost this round to the mines once again. And some of the uniformed comments on the demerits of the Tax withdrawal on this blog under score why it’s important to have an education and not just an opinion. Dr Bwalya Ng’andu you are a let down, May God replace you with someone better if your actions are not in favor of the poor.
@ ba warlord, I hear you. I also remember our govt a few months ago saying we are not going back on the plan to implement GST come what may. What changed ?. Govt also said KCM was going to be sold by end of July…flip flop, flip flop all the tym. It’s tym to eat humble pie….
Dear Fonti
Thank you for your mental alertness. We need folks like you in larger proportions.
We know this nonsense of getting mileage on social media. Ba Habazooka economics you leant in Russia is questionable. You want to discredit our team at ministry of finance? You are one of schooled morons. You want to get a job by bad mouthing other people . Shame….We know your style …no one is going to give you any position. Authorities know your plan. Find another job or business to make money
Since his appointment,I have hailed his banking background.However,his handling of GST in preference to VAT has just confirmed the fears I had about mining houses’ ability to arm twist governments.He even says government will not introduce GST any time soon.Really? How come?.I miss Maggie….she is a woman and half.Not even that lobby group called Chamber of mines could deter her courage for GST.GST was suppose to be mandatory to mines exporting base metals without value addition.
Economics is a social science, it amazes me how people would attack another on the basis of which country they studied it. It shows that people are speaking more from emotions than logic and intellect. Weigh the pros and cons. You pay Tax refunds to entities that themselves don’t pay Tax due to evasion. After all these years of independence people still can’t assess what’s beneficial to them. Habazooka is very right in this matter. Questioning his credentials based on where he studied is like saying the English you learn in Zambia is inferior to what is studied abroad.
hh advised against returning to sales tax preferring vat
Dr Habazooka Our recovery strategy should be less about from where Zambia will source its next loan or tax bonanza than how we will grow the pie, we need to diversify away from mining, improve productivity, ease logistical constraints and reduce government red-tape and overheads.As long as we have weak institutions ,we will never see the benefits of VAT or GST.
Ba Habazoka,by inference you saying that the president and the minister of finance were bribed . Correct if I’m wrong.
Ba Habazoka,by inference you saying that the president and the minister of finance were bribed . Correct me if I’m wrong.