Finance Minister Dr Bwalya Ng’andu has issued seven Statutory Instruments that actualise the many invectives that Government has provided to Businesses in view of the COVID-19 pandemic.
The Statutory Instruments issued with effect from Monday 27th April 2020 include SI Number 36 of 2020 aimed at assisting companies and businesses to manage their cash flows during this period by allowing input VAT claim on spare parts, lubricants and stationery.
Others are SI number 37 of 2020 which extends the list of medical supplies that are not subject to value added tax for an initial period of six months, SI number 38 of 2020 which suspends export duty payable on crocodile skins to free and SI number 39 of 2020 which suspends import duty payable on copper ores and concentrates to free.
According to a statement issued by Secretary to Treasury Fredson Yamba, the Minister also issued SI number 40 of 2020 which suspends export Customs duty payable on specified precious metals to free, SI number 41 of 2020 which will provide for suspension of excise duty on ethanol.
And Mr Yamba said the Minister has also issued SI number 42 of 2020 which suspends customs duty payable on specified medical supplies for an initial period of six months to support the fight against Covid-19.
In his third COVID-19 address to the nation, President Edgar Lungu said government decided to waive tax penalties and interest on outstanding tax liabilities resulting from the impact of Covid-19 to assist companies and businesses manage their cash flows during this period.
The President also said the Government extended the list of medical supplies that are not subject to import duty and value added tax for an initial period of six months to expedite the provision of medical related devices needed to support the fight against Covid-19.
In addition, Finance Dr Bwalya Ng’andu announced that the Government had removed the provisions of SI 90 relating to VAT claims, suspended export duty on crocodile skin, suspended import duties on concentrates in the mining sector, suspended export duty on precious metals and excise duty on ethanol.
Below is a full statement…
REPUBLIC OF ZAMBIA
www.mof.gov.zm
COMMENCEMENT OF NEW TAX MEASURES
Wednesday, 29 April 2020 – Following the assurance made by His Excellency the President, Dr Edgar Chagwa Lungu, during his last address to the nation on Friday 24th April 2020, that the Government had:
a) Decided to waive tax penalties and interest on outstanding tax liabilities resulting from the impact of Covid-19 to assist companies and businesses manage their cash flows during this period; and,
b) Extended the list of medical supplies that are not subject to import duty and value added tax for an initial period of six months to expedite the provision of medical related devices needed to support the fight against Covid-19.
The waiver on tax penalties and liabilities aimed at assisting companies and businesses manage their cash flows during this period of Covid-19, is being implemented by the Zambia Revenue Authority in accordance with the guidelines that the tax authority has since released to the public (check www.zra.org.zm).
In addition, following the pronouncements made by the Minister of Finance Dr Bwalya Ng’andu that the Government had decided to provide businesses with the following tax incentives:
a) Removal of the provisions of Statutory Instrument Number 90 relating to VAT claims on spare parts, lubricants and stationery to ease pressure on companies;
b) Suspension of export duty on crocodile skin;
c) Suspension of import duties on concentrates in the mining sector to ease pressure on the sector;
d) Suspension of export duty on precious metals; and,
e) Suspension of excise duty on ethanol for use in alcohol-based sanitisers and other medical related commodities.
Therefore, to facilitate the foregoing, the Minister of Finance Dr Bwalya Ng’andu has with effect from Monday 27th April 2020, issued the following Statutory Instruments:
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- Statutory Instrument Number 36 of 2020 – The Value Added Tax (General) (Amendment) Regulations, 2020. Statutory Instrument No. 36 0f 2020 shall be read as one with the Value Added Tax Regulations, 2010, the Principal Regulation (in which regulation 9A has been revoked). The Statutory Instrument is aimed at assisting companies and businesses to manage their cash flows during this period by allowing input VAT claim on spare parts, lubricants and stationery.
- Statutory Instrument Number 37 of 2020 – The Value Added Tax (Zero Rating) (Amendment) Order, 2020. Statutory Instrument No. 37 0f 2020 shall be read as one with the Value Added (Zero Rating) Order, 2014, the Principal Order. This statutory instrument extends the list of medical supplies that are not subject to value added tax for an initial period of six months to expedite the provision of medical related devices needed to support the fight against Covid-19. Statutory Instrument No. 37 0f 2020 is deemed to have come into operation on 1st April 2020 and shall stand revoked on 30th September 2020.
- Statutory Instrument Number 38 of 2020 – The Customs and Excise (raw Hides Skins) (Export Duty) (Suspension) Order, 2020. Statutory Instrument No. 38 0f 2020, which suspends export duty payable on crocodile skins to free, is deemed to have come into operation on 1st April 2020 but shall cease to have effect on 31st December 2020.
- Statutory Instrument Number 39 of 2020 – The Customs and Excise (Copper Ores and Concentrates) (Import Duty) (Suspension) Regulations, 2020. Statutory Instrument No. 39 0f 2020, which suspends import duty payable on copper ores and concentrates to free, is deemed to have come into operation on 1st April 2020 but shall cease to have effect on 31st December 2020.
- Statutory Instrument Number 40 of 2020 – The Customs and Excise (Precious Metals) (Export Duty) (Suspension) Order, 2020. Statutory Instrument No. 40 0f 2020, which suspends export Customs duty payable on specified precious metals (Regulation 2) to free, is deemed to have come into operation on 30th March 2020 but shall cease to have effect on 31st December 2020.
- Statutory Instrument Number 41 of 2020 – The Customs and Excise (Ethyl Alcohol {Ethanol}) (Refunds, Rebates and Remissions) Regulations, 2020. In exercise of the powers contained in section 89 of the Customs and Excise Act, the Minister of Finance, via Statutory Instrument Number 41 of 2020, has made regulations which will be deemed to have come into operation on 1st March 2020 and will provide for suspension of excise duty on ethanol if solely used in the production of alcohol-based sanitisers and medical related commodities. For the avoidance of ambiguity, a manufacturer shall not sell or dispose of the goods on which excise duty has been suspended pursuant to these Regulations without the authorisation of the Commissioner General of Zambia Revenue Authority, as long as the authorised user presents supportive information relating to the manufacturing process of the sanitizer. Statutory Instrument Number 41 of 2020 also provides that the Commissioner General of Zambia Revenue Authority may revoke the authority granted to an authorised user if such user ceases to use ethanol in accordance with authorised terms or contravenes or fails to comply with specified regulations of the Customs and Excise Act.
- Statutory Instrument Number 42 of 2020 – The Customs and Excise (Customs Duty) (Suspension) (Medical Supplies) Regulations, 2020. Statutory Instrument Number 42 of 2020 suspends customs duty payable on specified medical supplies for an initial period of six months to support the fight against Covid-19. Statutory Instrument No. 42 0f 2020 is deemed to have come into operation on 1st April 2020 and shall stand revoked on 30th September 2020.
CONCLUSION
Yesterday, the Ministry of Finance announced the appointment of a new board for the Zambia Revenue Authority (see Note 2) following the expiry of tenure of service of the previous Board led by Ms. Chileshe Kapwepwe in December 2019. While thanking Ms. Kapwepwe and her Board for the great initiatives made by ZRA during their tenure, the Minister of Finance was emphatic on the need for the new ZRA Board to not only ensure that the provisions of the above listed Statutory Instruments are thoroughly communicated to all stakeholders but also effectively implemented in line with the aspirations of the people of Zambia, through the commitment made by His Excellency The President Dr Edgar Chagwa Lungu, for the Government to cushion the impact of Covid-19 on business and enterprise in Zambia through tax relief and incentives, among other measures.
Issued by:
Fredson K. Yamba
Secretary to the Treasury
MINISTRY OF FINANCE
This minster has issued SI meanwhile Labour Minister Joyce Nonde-Simukoko is still sleeping and looking at fashion catalogues in her office as usual …really laughable
Lets borrow money from Mukesh. The indian tycoon, remember he is worth 43 billion dollars and we are just looking for 1.3 billion dollars from the IMF. Our ka GDP as Zambia is only 25 billion dollars and South Africa is 400 billion dollars, South African economy is 16 times bigger than our ka small shaky non resilient economy. Meanwhile a shelter called toll gate on the Ndola Kitwe dual carriage way cost us 4.6 million dollars, K90 million kwacha, about 46 billion kwacha non rebased.
Ndine Okalipa – When someone is worth $10 billion it does not mean he has that money sitting in his current account, some dont even have $1 million..look at Richard Branson, he is worth £4.5 Billion yet he wants UK govt to bail out his airline for £500,000,000..
Bazakamba mA haters in diaspora bazalema. You can’t keep a good government and party down. The people based in Zambia are watching what we are doing while the opposition continue yapping away. Before you know it it will be 2021 and ECL will be walking back into eagle 1 to continue his fight for zambianz
When are retirees going to be paid at PSPF? The system PSPF you have brought of paying people who retired in 2018/2019 leaving old ones who retired in 2016/2017 should PSPF. What is going on?
Working GRZ!!!
Kaizar Zulu – Whoever you are, please stop this monotonous and nonsensical reference to diasporans. It is stupid and sounds like a broken record now. The fact that you failed to find yourself in the diaspora, on merit, should not be a reason for you to sink so low. Some Zambians in the diaspora are doing highly technical jobs competing with the best in the world. As for the SIs, I would have preferred the Minister also including some incentives to local small scale business people – how do indigenous small Zambian business people benefit from these SIs? A bar, restaurant, motel, lodge owner, etc who had to close down, sent workers on unpaid leave, get relief – including the workers who were sent on forced unpaid leave or laid off? These SIs will benefit a few business people and mainly…
This useless PF gov’t now recognizes the economy is on life support .Too little too late in incentives the IMF forecasted the small Zambian ka GDP to shrink 3.5%.
My humble suggestion to this government in the times of covid19 pandemic is that not only should they exempt taxes for the business community alone but also the P.A.Y.E tax on the Zambian poor & heavily indebted worker must be reduced henceforth from 37.5% downwards until the coronavirus is over will they lift it again.