Zambia’s crocodile industry faces imminent closure as the imposition of a 10 percent export duty takes its toll, the country’s producers association has said.
In a statement, the Zambian Crocodile Farmers Association (ZCFA) said local crocodile skins were prized the world over for high-end footwear, handbags and garments, but now some US$1.3 million worth of skins were sitting in cold storage because farmers could not raise the up-front money to pay the tax.
Two farming operations were closing, with another two planning to follow.
“The situation is dire,” ZCFA chairman Johann Jordan said.
“Farmers need this revenue from sales to run their farms, and the nation needs the foreign exchange we generate from these exports, but this tax is on the verge of killing the industry.”
Since the export duty was introduced in January, crocodile farmers have paid US$350,000 on skins exported, sucking out all the liquidity from the industry, Jordan said.
He said operations were being wound down with virtually no egg incubation this year, just as the industry was finding its feet again after a tightening of grading standards that prompted a change in growing methods, stocking densities, chemicals and food formulation in recent years.
In 2018, Zambia exported about 31,685 farmed crocodile skins, but projections show this will slide by almost a third to 22,000 this year, half of what was exported in 2015.
“There are more than 600 jobs at risk, mainly in rural areas. Bearing in mind that it takes about four years to establish a crocodile farm, the chance of any resurrection of the industry once collapsed, is unlikely,” said Mr Jordan.
He said engagement between the association and the ministry of finance since January had not resulted in the tax being reviewed, despite suggestions that crocodile skins were caught in wider legislation on the export of hides and skins due to an administrative error.
“Crocodile farming is a foreign exchange earner and generates employment. It is an industry that should be attractive for long-term growth and not short-term fiscal gain,” Jordan said.
“The time is now critical for a decision to be made by government if this industry is to survive in Zambia.”
What were the taxes before the 10%? And what are you proposing?
ZRA with Kinsley Chanda as boss are not fit for purpose. The problem is bigger than ZRA, it is Edgar. He has no business acumen and no bigger picture acumen unless you think casinos are the longterm solution to Zambia’s economic woes.
Tax law and policy is made by govt and not ZRA. So spare the tax collection agency for now. What saddens me even more is that they want the tax paid upfront. Wht kind of madness is this? Business to business sales are normally on credit. How do croc farmers finance this in a high interest rate environment? Zambians are watching you, believe me.
If indeed croc stuff is a money spinner, govt should allow this association to crop the beasts that are terrorising our people on the lakes and rivers. I hate crocs
Matador: Crocs are a critical part of the aquatic food chain in those lakes. They’re attacking people because those people hv caught most of the fish thus depriving crocs of their main food supply. Because they hv to survive, they look for alternative food and they catch humans. It’s that simple. There’s no “ngwena yakutuma” here. It’s adaptation by the crocs.
Shortage of revenues and the government is groping everywhere for whatever it can pick. The problem is that the government makes these crocodile farmers pay tax on a presupposed income at point of sale. The farmers pay government as well as absorb/pay the import tax at destination!
Tax holidays are over guys.
Export tax is welcome because all the moneys farmers realise are externalized.
Why do people want to do business without paying taxes to Government.
Just pay.
Ken: Obviously u hv no idea hw govt and business ought to relate to each other. There’s no croc skin processing business in Zambia which the farmers are depriving of inputs by exporting skins. Instead of pouring money in wildgoose chases such as Zambia Airways, IDC could easily fill the gap by investing in a downstream company that could be processing croc skins.
While it is important to ensure taxes do not kill businesses,these farmers should instead work with GRZ(Min.of Finance,Min.of Commerce,ZRA) to agree on should be fair win-win tax rather than just closing down,the same way mines do when taxes are revised.The problem with these investors, like game park lodge owners,tour operators,mines is that they do their transactions outside and believe that from Africa,Zambia everything must be free! Apart from lowly paid workers what other contributions are they going to make if they don’t pay even minimal tax?
Being a crocodile farmer I can tell you now that you do not know what you are talking about.
1. All money derived from sales are paid directly in to Zambian bank accounts – not one cent is externalised !
2. We are one of the industries that pay the highest wages.
3. We have to abide by strict International laws regarding labour and animal welfare if we do not we are unable to sell our skins internationally.
4. We already pay high taxes and levies on our skins.
This 10% export duty was introduced without any consultation. I am wondering what you will say when 600 people have to loose their jobs as companies cannot continue to run. It takes 4 years to produce a skin – can you tell me which industry can sustain these costs without going under ??
It’s about time people…
@Nemwine: I am sure you do not know how government functions.
The only source of revenue for Govt is taxes. Investments are just meant to stimulate growth.
For you to tap into the natural resources of the land, you need to be prepared to share your proceeds with all Zambians. Just factor the 10% into your costs and you will realize that you still have more than 50% net profit. The problem you are used to 200% profits. I have a suggestion, just cut that expenditure on the holidays in the Caymans.
The ignorant will always remain ignorant. Instead of making up stories why don’t you go and visit a crocodile farmer and find out the truth…….your allegations about caymans etc just shows how uninformed you are !!!
Chipante pante PF government.
Others are giving their businesses tax cuts and we are punishing them with more tax that is not benefiting the country as a whole. If the taxes were being well utilized then we shouldn’t be having load-shedding and a bad economy. Someone tell this government that they’re killing job creation and sending more people on the streets. How does anyone make a profit in the face of load-shedding and a tax hungry government
I didn’t know that we have farmers of these ugly creatures.