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The gardens of Chita Lodge in Lusaka turned into a lively beer garden. The second edition of Oktoberfest Lusaka, a beer festival dubbed “Beerville” received over 4,000 guests who were entertained with a musical lineup of rotating Djs. DJ V Jeezy was the headline act, making history as the first local artist to headline an Oktoberfest in Zambia. Beerville came alive with over 15 vendors ranging from kraft beer to delicious festival food. Circus Zambia and Zambian Breweries were there with thrilling activations. We are already counting down to next year, hope to see you there!
The Drug Enforcement Commission (DEC) has unearthed over 100 tonnes of fresh cannabis in Kamwendo village of Mpika district in Muchinga province.
The contraband involved about 120 bags weighing more than six tonnes of loose cannabis have since been confiscated while the uprooting process of the fresh psychotropic plants has commenced in the same area.
DEC Public Relations Officer Kamufisa Manchishi, says the contraband was unearthed in three fields which were discovered after an intense joint operation involving the Department of National parks and Wildlife, Zambia Army and the Police
Mr. Manchishi stated in an interview with ZANIS in Kamwendo Village at the psychotropic plantation where the contraband was unearthed that 18 suspects have since been arrested.
The suspects are currently detained at Mpika police station waiting to appear in court soon.Among the suspects include Stanley Kazembe popularly known as ‘Satana’, a sub headman who is allegedly be key suspect behind the illegal cultivation of cannabis in the area.
“ The illegal plantation of cannabis is also believed to have been supplying the Copperbelt, Lusaka as well as Muchinga provinces in exchange for goods and other products, “ he said.
DEC has for this reason sounded a strong warning to farmers in the area involved in the illegal cultivation of cannabis to desist from engaging themselves in the illegal vice.
“ Whoever will be caught practicing the illegal cultivation of cannabis will surely face the wrath of the law, “ he said.
As a remedy, the Drug Enforcement Commission is working hand in hand with some stakeholders to support small scale farmers in engaging in genuine farming activities in order to improve their livelihoods and thus discourage them from illegal practices.
The joint operation has since proved to be one of the most successful operations in Muchinga that has unearthed over 100 tonnes of cannabis plantations in the province.
Price WaterHouse Coopers economic adviser Joseph Chibuye said the current state of the Zambian economy will not see new investors coming to invest in the country.
Mr.Chibuye has since appealed to government not to default in repaying its debts.He said the poor performance of the kwacha is putting more pressure in debt servicing.
Mr. Chibuye said this in his Zambia’s 2019 National Budget analysis and outlook at protea hotel in Ndola today.
And PWC tax expert Jyoti Mistry in her presentation said a volatile tax regime is not conducive to long-term investment.
Mistry said concentrating the revenue generation measures on the mining industry renders the Zambian economy highly vulnerable to movements in commodity prices and global economic conditions.
“Additionally, mineral royalty tax will no longer be deductible as a cost for purposes of determining the taxable income. Whilst the majority of the mining sector will face an additional burden, companies that use the copper cathodes to add value will see a reduction in corporate income tax rate from 35% to 15%. It should be appreciated that a volatile tax regime is not conducive to long team investment,” Mistry said.
“The impact on jobs, investor confidence and investment arising from the last spate of reactive changes to the mining tax regime between 2013 and 2015 should not be forgotten. It is also a great concern that the current pipeline of exploration projects has diminished significantly. Any disinvestment or curtailment of operations by these companies would have a significant impact on the rest of the economy.”
She said it must be appreciated that the Zambian economy is still highly dependent on the mining sector.
“Given the country’s difficult situation, government may have taken a calculated risk by concentrating the revenue generation measures on the mining industry. However, this is a precarious measure as it renders the Zambian economy highly vulnerable to movements in commodity prices and global economic conditions.”
Mistry said the private sector is the main potential engine for economic growth in Zambia.
“Despite this, the sector faces an increasing number of obstacles that could hinder its development. Most notably, government domestic borrowing continues to crowd out the private sector. Government says it will address this by dismantling arrears, although it has yet to give details as to how it will fund this. The private sector also faces increased costs in light of the new 30% restriction on interest seduction on loans, as discussed earlier, plus the recent increase in minimum wages.”
“Furthermore, continued kwacha weakness in light of Zambia’s Fiscal position and higher fuel prices could also weigh heavily on an already over burdened private sector if these trends continue,” she said.
The function was also attended by Ministry of Finance permanent secretary Emmanuel Pamu. Dr Puma attributed the depreciation of Kwacha to more importation than exportation of goods.
Power Dynamos defender Jimmy Dzingai has been left out Zimbabwe’s 2019 AFCON Group G top two qualifier doubleheader next week against DR Congo.
It is the second successive time that coach Sunday Chidzambwa has left out the defender from his team after last month’s 1-1 away draw against Congo Brazzaville.
Dzingai joined Power in July from Harare club FC Yaddah and has scored two goals for the Kitwe side.
The defender was part of Zimbabwe’s 2018 COSAFA Cup winning team that beat Zambia 4-2 in the final played in Polokwane, South Africa.
Zimbabwe and DR Congo head into their October 10 date in Kinshasa tied on 4 points from two matches, three points ahead of Congo and Liberia.
Police in Livingstone have finally arrested and charged the two Chinese nationals and nine Zambians with various offences under the state security act, penal code and firearms act respectively.
Southern Province Police Commissioner Bonnie Kapeso said this means that Niu Zhichuan, 37, owner of Warm Harbour Hotel in Livingstone, Xu Hvibo, 31, and Senethinia Mudenda, 36, Zambian Director of Alert Security Company, all of Livingstone, with eight others will remain in detention until their matters are determined by the court of law.
The eight others who are security guards include Abel Sibuku, 24, Edward Litungi, 24, Fred Nalumino, 18 and Lubinda Lubinda, 24, all of Livingstone.
Others who are also resident in Livingstone include Sam Muleya, 27, Bonwell Chisha, 22, Likando Masheke, 39 and Robinson Mumba, aged 23.
Zhichuan has two counts of failing to secure a firearm and unlawful drilling while his counterpart Hvibo faces two counts of unlawful possession of firearm and unlawful drilling.
Director of Alert Security Company, Mudenda, is charged with three counts of harboring, unlawful drilling and unauthorised use of uniforms, chapter 111 of the laws of Zambia.
All the eight security guards are slapped with unauthorised use of uniform and unlawful drilling, chapters 111and 87 of the laws of Zambia respectively.
The accused persons will appear in court soon and will remain in custody.
North-Western province minister Nathaniel Mubukwanu (l)
North-Western Province Minister, Nathaniel Mubukwanu has applauded the Public Service Pensions Fund Board for coming up with a home ownership scheme initiative.
The initiative is for its members, and is aimed at preventing old age destitution.
Mr Mubukwanu explained that the scheme has so far seen many people retire and still be able to live in the comfort of their homes unlike years back when retirees would go into destitution.
Mr Mubukwanu said this in a speech read on his behalf by Deputy Permanent Secretary, Douglas Ngimbu, during the commemoration of the international day of older persons.
And Public Service Pensions Fund Chief Executive, Patrick Bobo said various strides have been made in terms of service delivery to senior citizens such as not having to stand in long queues to get a service.
Mr Bobo said this in a speech read on his behalf by his Director, Matandiko Matandiko.
Meanwhile, North-Western Province Pensioners Association Chairperson, Kenneth Kapata revealed that 200 members have benefited from the scheme in various sectors such as agriculture.
[ZNBC]
Minister of Finance ,Margaret Mwanakatwe arrives at parliament building for 2019 National budget presentation in Lusaka.
By Kalima Nkonde
In October,2018, this writer penned a strong Op- Ed on the 2018 budget and criticised it as flawed because it did not address issues of tax evasion and avoidance, illicit financial flows and taxing the mines sufficiently as part of domestic revenue mobilisation strategy. The 2019 budget does address most of the concerns raised in that article and some of the recommendations in recent articles.
The big question is, will it be implemented given that short term political expedience is what drives economic policy implementation in Zambia and past history on implementation is not impressive. The jury is out. Budgets are useless without a process of budgetary control- continuous monitoring of achievement of targets set and taking timely corrective action.
The main issues that I have raised in the past twelve months in my articles are: excessive debt, excessive expenditure, lack of liquidity for private sector development, the mines and the Chinese investments not benefiting the ordinary Zambians and the treasury. The budget to a reasonable extent does address some of these issues and this article outlines the areas of the budget which are very progressive and are likely to have a positive impact on economic activity and job creation.
The budget objectives set are also quite realistic and in fact in some ways, are more on a conservative side, easily attainable and not setting a challenging aspiration level.
Agriculture infrastructure
The government plans for the Agriculture sector where measures relating to increase in farmer input support, promotion of aquaculture through cage farming initiatives in lakes Mweru, Bangweulu, Kariba, Tanganyika and kafue river, building of irrigation infrastructure, establishing a $100 million tractor factory and the promotion of mechanisation of agriculture in general should be commended. However, the level of investment is insufficient; the sector needed more money to fast track economic recovery. It makes no sense at all to allocate K5billion to defence or 5.8% of budget in peace time. This is getting priorities wrong. The best security for any smart politicians is by taking care of citizens’ economic well-being through job creation and providing social services and not buying excessive arms and strengthening the police and armed forces. Where is the fear coming from to warrant arming security forces to the teeth, one may ask?
Private sector promotion
It is a well-known fact that the promotion of private sector development especially the Micro, Small and Medium Enterprises (MSMEs) is the sure way of creating jobs. The budget does have measures aimed at promoting private sector development. The issue of payment of government creditors in form of suppliers and contractors is mentioned in the budget but it should be fast tracked and not delayed. Government commitment to reduce its domestic borrowings from domestic market from 4.0% to 1.4% of GDP will have positive impact in terms of making cash available to small businesses. The two measures if implemented in full will have positive impact within months and the cry by Zambians including venders of “indalama nashishupa’’ (Cash is scarce) will be a thing of the past. This is not rocket science. The increased of procurement by government from MSMEs will also go a long way in the growth of the private sector.
On the basis of the writer’s experience as a former advisor on a very successful USAID funded private sector development project with a foreign government, the Zambian government is advised to change its mind set of thinking government or bureaucrats know more about business than the private sector and need to prescribe what is good for them. The government needs to regularly and formally engage and consult with the private sector for the budget objectives to be achieved. It is important regular and formal consultative meetings and conferences are held between the private sector and the government where ideas could be exchanged and the two parties get to know each other’s challenges so that solutions for the benefit of the economy are mooted out.
Manufacturing sector interventions
The government interventions in the manufacturing sector which are meant to encourage private sector investment were not sufficient in this budget. Apart from encouraging the private sector to invest in adding value to copper cathodes by reducing the company income tax from 35% to 15%, which is commendable, the other initiatives good as they may be, where government driven. This include the establishing of manufacturing facilities through IDC for fruit processing in Eastern province, Cashew nut processing in Western province and pineapple processing in North Western province. The government needs to seriously look at reducing the rate of income tax for manufacturing companies to between 20%-25% in order to encourage and manufacturing.
Anti -Tax avoidance measures and transfer pricing measures
It is gratifying that the government has finally taken some serious action about multinational tax avoidance and transfer pricing schemes as noted by Finance Minister, Margret Mwanakatwe budget speech.
“Sir base erosion and profit shifting through aggressive tax planning is detrimental to enhanced domestic resource mobilisation,” She said.
There are a number of measures that were announced to minimise the risk of tax avoidance and transfer pricing which include the following:
• Limiting the interest allowable to be deducted to 30% of profit before interest, tax, depreciation and amortisation. The issue is multinationals including mines where creating artificial losses to avoid tax by charging abnormal interest payable to sister companies who they have borrowed money from to invest in Zambia
• Increased the period for multinationals should retain records for transfer price assessment from 6 years to 10 years
• Increasing penalty for transfer pricing offences to eight million penalty points
In future, the rules regarding the issue of the period for which multinationals especially mines write off their losses against income need to be seriously looked at. There are losses artificially created by capital allowances on “ Capital investments” which should be thoroughly investigated and loophole sealed. It is rumoured that there are mines that have operated for over twenty years and they have never paid income tax as they perpetually report tax losses.
Comprehensive Tax and mining reforms
The 2019 budget has some of the most comprehensive tax reforms aimed at the corporate sector especially the mines in recent years and which most patriotic analysts feel are long overdue as Zambian citizens have carried the weight of the country’s tax burden as the President of the economic Association of ZambiaLubinda Habazooka observed.
“How can you pay mineral royalty of 3.5% and then fail to declare corporate income tax despite the fact that you receive $700m in VAT refunds, $240m in electricity tariffs, $60m in fuel subsidies? It’s high time the mines came on board to help government raise resources.” Lubinda Habazooka said. “Government buys power from Maamba coal plant at 13 cents then sells to the mines at 6 cents when households and other companies pay 9 cents? Mines should stop holding government at ransom.”
The budget has introduced the a number of major tax reforms which are meant to raise more government revenue, broaden the tax base and bring in some semblance of equity so that the multinationals and the mines pay their fair share of taxes. These include the increase of royalty tax paid by the mines by 1.5% across board, the discontinuance of royalty tax being deducted as an expense from company income which previously contributed to tax losses thereby allowing mines not to pay income tax, taxing the imports of copper and cobalt concentrates at 5%, increase of withholding tax on dividends, interest and branch profits to 20% from 15%.
The government is also seriously looking at reviewing the tax incentives given to investors and stepping up monitoring of all investors who have accessed the tax exemptions to ascertain whether they have fulfilled their investment pledges.
The major tax reform with far reaching consequences is the abolishment of the VAT tax regime and reintroduction of Sales tax. This must have caught most people by surprise but according to the Finance minister, the VAT tax regime as it stands now is not benefiting the treasury.
The government’s intention of revising the Mines and Mineral development Act is also a welcome development they are well advised to look at the Tanzanian Act, which was revised in recent years as well as the Botswana Minerals Act; they may just learn one or two things. It is hoped that some of the unfair clauses in the Mining development agreements can be addressed. It is, however, important to make consultations with stakeholders in the process of revising the act.
Why VAT is being replaced by Sales tax
The Zambian government’s decision to scrap VAT is certainly informed by its experience with Value added Tax. VAT as a tax regime is good as it is supposed to raise more tax than sales tax in that it covers a broader base. In addition, it encourages investment, but if truth be told, the mines are responsible for the scrapping of VAT as they have abused it and used it as a source of capital and as a ransom to government.
According to finance Minister Margret Mwanakatwe, “VAT works better when you have an economy that has a strong manufacturing base. But we don’t have it! We are in constant refund and it cannot work now. We have to grow the manufacturing base because that is the sector that needs that support of a VAT refund. Right now, VAT is a subsidy and we are in austerity – we can’t afford subsidies. It is as simple as that. So, 1st April sales tax comes into play”.
According to some experts, government will save over a billion US dollars in terms of refunds as the mining industry gets approximately US$700million refund per year and the rest $300million. The mining industry is the greatest beneficiary of VAT refunds and any attempt to tighten claim procedures like revision of rule 18 which required claimants of refund to prove that the materials they bought were used in production by way of receipts and proof of final destination of the copper were resisted.
In November, 2017 according to ZRA Commissioner General Kingsley Chanda, Zambia Revenue Authority (ZRA) paid out over K4 billion in value added tax (VAT) refunds to mines and other sectors six months out of which 76 percent was made to mining companies.
As an independent analyst ,with no political agenda and based on my current and past views on how the economy can be turned around, the 2019 budget is a good document although it does not address some important and topical issues of high level corruption .It is just mentioned it in passing by what she calls “rent seeking” behaviour by civil servants which is low level stuff and not the elephant in the room- corruption at very high levels as recent scandals and the financial intelligence disclosures. Another important issue missing in the budget, given the plummeting kwacha, is the high level of foreign exchange retention by the mines. It is a paradox that the country’s foreign reserves do not improve even when copper prices are sky high! Zambia will have to bite the bullet and address this contradiction sooner rather than later.
The issue of the country’s debt was also not covered sufficiently as there were no details as to the actual measures that have been put in place to reduce the pace of debt contraction. The finance Minister admitted to that in some an indirect way.
“ I will, within the current session, be coming to this house with specific details on the implementation of austerity measures related to debt,” Mrs. Mwanakatwe said.
CONCLUSION
Although the budget looks good on paper, most Zambians will not be excited by it as we have been down this road before, where good policies were announced but not implemented mainly due to political considerations.
The first major problem as in the past to implementing policies, is the Presidency. President Lungu consciously or unconsciously, tends to undermine his own finance minister and government, by making statements that are seemingly impulsive on airport aprons or during bye elections campaigns which contradict his own government economic policies and makes observers confused about what to believe and creates uncertainly, the number one enemy of investment.
One previous case in point where he undermined his Finance Minister, Mr Alexander Chikwanda was the 100 % reversal of 20% royalty tax on mines-without any negotiations -after Mining houses lobbied him directly, when his finance ministers had sworn that they will not be reversed.
Whilst IMF talks were taking place and Ministry of finance was saying Zambia was going to reduce debt, the President was on the platform in Chawama saying government will continue borrowing for development. Also, while negotiations with IMF were at a crucial and sensitive stage, he said if IMF wants, they can go.
In June, 2019, austerity measures were announced, but immediately new districts were announced in North Western and Eastern province, huge delegation- may be the largest of all the 52 African countries that attended FOCAC meeting- went to China and spent a week. And amidst austerity, a Chartered plane was hired for the UN general assembly when neighbouring Presidents like Magufuli and others flew commercial. The list of contradictions and lack of implementation of policies is long.
One hopes that the President and his government would be motivated this time around by the IMF rejection of the bail out by implementing tough home grown solutions and proof that we can solve our own problems like pointed out before by other experts. Although the road will be tough, as Finance Minister pointed out, the pain may only be for two years and the fruits of recovery will start to show if we stick the plans.
“ Delivery of fiscal consolidation will require extraordinary measures. Courageous decisions are required to meet these challenges which need to be supported by a united people”, Finance Minister said.
The Budget is a short term document covering 12 months and so government is well advised to prepare two critical medium term documents to complement the budget and NDP 7, which cover two key areas of the economy-Mines and China. I would recommend studies are conducted with a view to develop the Mining development strategy and Zambia- Chinese cooperation strategy.
The writer is a Chartered Accountant by profession and a Private Sector Development expert. He is an independent commentator/analyst. He has lived in England, South Africa and Botswana for over 25 years.
Green Buffaloes are relishing their Barclays Cup semifinal clash against sister club Young Buffaloes.
The two Lusaka based army sides will clash on October 20 in the last four after winning their respective quarterfinals in Kitwe at the weekend.
GBFC eliminated Green Eagles via a 1-0 win on Sunday while Young Buffaloes shocked holders Zanaco 2-1 earlier on Saturday.
“I think it will be an exciting game playing against Young Buffaloes. It is our nursery but we can’t take anything away from them,” Buffaloes coach Bilton Musonda said.
Musonda brushed aside assertions that Young Buffaloes may not give their sister club a tough match.
The two clubs usually exchange players, coaches and attire.
“We can’t say they will give us an easy game. Even them (players and coaches) at Young Buffaloes they want money and to improve their CVs (Curriculum Vitae),” he said.
Musonda said his team was seeking to win the Barclays Cup as consolation after failing to win the league.
Nine UPND cadres who were facing charges of riotous behavior relating to the alleged riotous conduct at the High December 15, 2015 have been discharged by Principal Resident Magistrate David Simusamba.
The suspects were arrested at High Court after they allegedly started rioting after a petition case in which their two leaders Hakainde Hichilema and his vice president Geoffrey Bwalya Mwamba were seeking for a right to be heard in their presidential petition which was thrown out by the Constitutional Court.
The accused Robbie Mukamba and eight others walked to their freedom after being discharged following the state’s application to withdraw the matter due to the absence of their witnesses pursuant to section 88A of the Criminal Procedural code.
The court has since allowed the application allowed the application and discharged the suspects
Police in Zambia arrested two Chinese nationals over the weekend over allegations that they were giving illegal military training to members of a local security firm.
Police said one was arrested on Saturday and another on Sunday in the country’s tourist capital, Livingstone.
In total, at least 11 people, including Zambians, were arrested in the operation.
A Zambian director of Alert Safety Security in Livingstone was also detained.
The nine were round up near the Livingstone Weighbridge and two kilometres off Great North Road.
Southern Province Police Commissioner, Bonnie Kapeso said the suspects were found with one pistol, seven shotguns and one big air gun with a box containing shotgun ammunition.
Southern Province Police Commissioner Bonny Kapeso said in a statement that Police had confiscated shotguns, a pistol and ammunition, he added.
The military hardware allegedly belongs to a security company whose proprietor is Lusaka based.
Mr. Kapeso said the group has been conducting trainings without clearance from the police further adding that the uniform used looks similar to the one used by National Parks and Wildlife Authority.
“We have arrested another Chinese national and a Zambian director of Alert Safety Security in Livingstone, who are both suspects in the case of unlawful drilling eight shotguns and pistol were recovered. This now brings to eleven the total number of suspects who are helping with police investigations with two Chinese nationals and nine Zambians. We have constituted a combined team of District Joint Operations Committee (DJOC) to probe the matter,” said Mr. Kapeso in a statement
On Saturday, Kapeso disclosed that the Chinese trainers had imported military fatigue gear for the Zambians trainees from China.
“Upon investigations, one pistol, seven shotguns and one big air gun with a box containing shotgun ammunition were recovered allegedly owned by the security company proprietor. The group has been conducting trainings without clearance from the police because the uniform used looks similar to the one used by Zambia Wildlife Authority (ZAWA),” said Kapeso in a statement.
He said Police are waiting for the owner of the security company to establish ownership of the guns since he is based in Lusaka while the suspects are in custody helping with investigations.
Vedanta Chairman Anil Agarwal
Loud protests took place at Vedanta Resources’s last London AGM on Monday.
Company founder and Chairman Anil Agarwal was not present, creating uproar among protesters and shareholders.
Vedanta Resources officially de-listed from the London Stock Exchange at 8am Monday morning.
Inside the meeting, dissident shareholders asked questions about the police shooting of thirteen protesters against Vedanta’s copper smelter in Tuticorin, Tamil Nadu in May.
Another shareholder asked how much Vedanta spent on litigation or bribes, given the number of court cases they are tied up in at their various operations.
Meanwhile a large contingent of Tamil people played traditional Parai drums and demanded ‘justice for Tuticorin’ outside the AGM.
Hours before the meeting a protest was held at Financial Conduct Authority (FCA) headquarters in Canary Wharf, demanding that British regulatory authorities do not let Vedanta flee the London Stock Exchange without being held to account.
Representatives for FCA Directors were handed copies of a damning report ‘Vedanta’s Billions: Regulatory failure, environment and human rights’, published by Foil Vedanta(1) and a coalition of organisations days before.
The report was described by Hywel Williams MP as ‘deeply concerning and disturbing’ and gives a comprehensive account of legal judgments against Vedanta across its global operations, blaming the City of London and FCA for failing to regulate or penalise the company, which is the latest in a long list of London miners linked to ‘corporate massacres’.
On Thursday 27th September popular Zambian reggae artist Maiko Zulu – was arrested outside the British High Commission in Lusaka, Zambia, holding a banner stating ‘Hold Anil Agarwal to account for Zambian crimes before de-listing.’
Maiko gave a statement to the media, referring to the Vedanta subsidiary KCM’s pollution of the River Kafue, for which the landmark case of 1,826 farmers against Vedanta will be heard in London Supreme Court in January 2nd as well as the Tuticorin ‘massacre’:
“Vedanta is being de-listed from the London Stock Exchange following serious crimes against indigenous people of India and the pollution of our own Kafue River which is a source of livelihood for thousands of peasants. The inequality that multinationals are creating cannot be left unchecked and we will continue standing up and facing arrests for the good of our people. Our fellow protesters were shot at by police in India,” Maiko said.
Thirteen people, including women and children were killed by police shooting on the 100th day of protest against Vedanta’s copper smelter in Tuticorin in May, as well as 217 injured, and nine disabled for life.
Samarendra Das from Foil Vedanta, primary author of the Vedanta’s Billions report, says “Anil Agarwal is so desperate to avoid public scrutiny following the Tuticorin massacre that he ran away from his own company AGM. We cannot allow him and his board escapes accountability and justice in the UK, under whose jurisdiction they have committed widespread financial, human rights and environmental crimes. The FCA and City of London must now initiate proceedings against Vedanta or remain complicit in enabling and mitigating these abuses.”
In Zambia, where the company was found guilty of a major pollution incident in 2006, and there is evidence of widespread transfer mis-pricing and tax evasion, Vedanta’s subsidiary KCM recently had its power supply partially cut by the Copperbelt Energy Corporation due to its refusal to settle a three month electricity bill.
Contractors and suppliers of KCM are also in a long term dispute with the company over non-payment of invoices.
Zambia will abolish Value Added Tax (VAT) and replace it with a non-refundable sales tax in April, Finance Minister Margaret Mwanakatwe said on Monday, a move likely to help the government boost revenue collection and bring down mounting debt.
Mwanakatwe said the Zambia Revenue Authority (ZRA) would finalise audits of all outstanding VAT refund claims and collect any unpaid taxes before making the change.
“Sales tax is coming on April 1. We do not have a manufacturing base. There is no value addition,” Mwanakatwe said at a post-budget meeting with business people.
In her budget speech on Friday, Mwanakatwe said Zambia will introduce new mining duties and increase royalties to help tackle debt.
The International Monetary Fund has put on hold talk about an aid package due to Zambia’s debt levels which it describes as unsustainable.
ZRA said in July it had paid out 4.2 billion kwacha ($338.7 million) in VAT refunds, including 2.5 billion kwacha to the mining companies in Africa’s second-largest copper producer.
Analyst Chibamba Kanyama of the Economics Association of Zambia said the introduction of sales tax would boost revenue collection.
“The major thing is that it will stop the refunds. The government will also collect more revenue because there will be less cheating as tax will be on the final product,” Kanyama said.
Zambia’s kwacha fell more than 2 percent on Monday to trade at 12.4750 per dollar at 1229 GMT as investors fretted over the nation’s debt and changes to the mining tax regime.
“Investors have not been rolling over because they are worried about the debt. It is also due to the impact of the planned changes to the mining tax regime,” Kanyama said.
Kanyama said investors were waiting to hear what was agreed with China on the planned restructuring of Zambia’s debt.
Mwanakatwe said the government remained committed to settling the verified VAT refund claims accumulated before changing the law.
Zambia has been withholding some money owed to mining companies in tax refunds because the correct documentation has not been provided.
Mwanakatwe also said a study to determine the cost of providing electricity by state-owned Zesco Ltd, which was due to be completed this year, would finish in April next year.
“We are currently procuring somebody from the UK to come and do the study. We have said it must be done by April,” she said.
Local Government Minister, Vincent Mwale officiates at this year’s commemoration of the seventh international fire fighters’ dayMinister of Local Government Vincent Mwale has challenged councils to invest in income generating projects to stop the over dependency on the central government.
And Mr Mwale has praised Kazungula council for being up to date with workers’ salaries.
The Minister said this in Kazungula when he officially opened a 3-million Kwacha Kazungula Council Lodge which is projected will make a 6-hundred thousand kwacha profit annually for the local authority.
Mr Mwale says councils should reduce dependency on central government through initiatives like the lodge for the Kazungula council which was built with funds from the Local Government Equalisation Fund and locally sourced resources.
And Kazungula Council Chairperson, Eason Musokotwane said the council intends to expand the lodge facility to include more rooms and a swimming pool.
Mr. Musokotwane said the council remains committed to developing and improving the delivery of services in the district.
First Lady Esther Lungu with Minister of General Education David Mabumba (R) and Save the Children Operations Director Chilobe Kambikambi (C) during the commissioning and handover of the 20 early childhood centres that were constructed by Save the Children Foundation in Western Province to the Ministry of Education at Kanyonyo Primary School
General Education Minister, David Mabumba says the 2019 national budget says the proposed 2019 national budget focuses on reforming and transforming key components in the education system.
Mr. Mabumba cited industrialization as one key component that the budget will help to transform by supporting the local production and purchase of school items such as uniforms, linen and furniture.
The Minister told ZANIS in an interview that recapitalisation of the Zambia Education and publishing House (ZEPH) is another milestone in ensuring that production of books for pupils is localised.
Mr. Mabumba further said the budget will promote the construction of new secondary schools and upgrading of some primary institutions.
He explained that the move will help to cushion on the demand for secondary education because there are more primary than secondary schools in the country.
Minister of Finance, Margaret Mwanakatwe presented the K86.8 billion 2019 National Budget under the theme ‘Delivering Fiscal Consolidation for Sustainable and Inclusive Growth’.
She proposed to spend K13.3 billion in 2019 which translates into 15.3 percent of the budget allocation on education and skills training development.
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