Minister of Finance and National Planning Situmbeko Musokotwane says Zambia has lost approximately US$200 million in revenue due to tax relief measures implemented on petroleum products.
Dr Musokotwane explained that the loss stems from government’s decision to suspend excise duty and zero-rate Value Added Tax (VAT) on fuel, a move aimed at cushioning citizens and businesses from rising costs.
The minister made the remarks during the IMF and World Bank Spring Meetings held in Washington, D.C., where he shared Zambia’s experience in managing the economic impact of global shocks.
Speaking at the IMF Africa Fiscal Forum, Dr Musokotwane called for African countries to adopt more strategic fiscal policies that go beyond responding to crises and instead focus on long-term economic transformation.
He warned that a potential energy crisis linked to tensions in the Gulf region poses an immediate threat to African economies over the next 12 months.
According to the minister, such a crisis could drive inflation higher, increase production costs, and put additional pressure on already strained national budgets.
“African governments must also continue undertaking domestic reforms that improve resilience and strengthen the quality of public spending,” he said.
Dr Musokotwane further challenged African nations to reflect on why the continent has fallen behind in sectors where it once had competitive advantages.
He stressed the need for increased investment in productivity, skills development, manufacturing, and value addition.
“Economies that produce more, diversify more, and trade more competitively are better positioned to absorb shocks without slipping into repeated crisis,” he said.
Loses US$200 Million in Fuel Tax Relief Measures
Should nt we fire them? Who would lose that kind of money and still turn up for work?