Economy

Mwanakatwe Calls for Review of Domestic Revenue Mobilisation Strategies

Finance minister Margaret Mwanakatwe has called for a constant review of the country’s domestic revenue mobilization strategies to sustain Zambia’s development agenda and reduce poverty.

Speaking during a Sales Tax consultative meeting in Lusaka this morning, Mwanakatwe said domestic tax revenues account for about 60 percent of the country’s national Budget.

“The decision by government to abolish Value Added Tax and replace it with Sales Tax is necessary to stop the refund debt escalation, create fiscal space, to pay the outstanding VAT refunds, and more importantly increase revenue collection to support government’s social development programs. As you maybe aware, following Zambia’s ascendance to a Lower Middle Income country, fiscal support from our cooperating partners has overtime been reducing. We should therefore constantly review our domestic revenue mobilisation strategies in order to sustain our development agenda and reduce poverty,” Mwanakatwe said. “As government, therefore, we take keen interest in seeing that domestic resource mobilisation is enhanced. Again, as government, we realise that changing a tax system is a major reform which requires broad consultation. Since October 2018, government has been engaged in internal consultations between different ministries and agencies in order to fully appreciate the impact of this change on the economy.”

She said consultations have been made with various sectors before the implementation of the Sales Tax.

“On the external front, the government has been in consultation with various players in the economy. Thus far, consultations have been made with the agriculture, manufacturing, mining, tourism, energy and financial sectors. Given the structure of our economy, we are convinced that from the tax administration point of view, government will collect sales tax with better efficiency. In order to address the effects of cascading associated with Sales Tax, exemptions have been provided on capital goods, basic foods items, and essential goods and services in the health, education and water sectors,” Mwanakatwe said.

“Exemptions and selected inputs into production in priority sectors identified in the revised 7th national development Plan namely agriculture, manufacturing, mining and tourism have also been provided to ensure that the cost of production is low. Given the exemptions provided under Sales Tax, it is expected that production costs will remain relatively unchanged. It is thus expected that the Sales Tax will only increase prices to the extent of the number

10 Comments

  1. Kings

    Zambia Is Not A Poor Country According To My Observation, Just That We Always Have Selfish Individuals In Leadership Who Have No Heart For This Nation, Plunderers Of Waste Kind, Whose Life Style Is That Of Those In Developed Countries. Why Have You Mentioned Poverty Which Does Not Even Affect You In Any Way? I Have Hear What You Have Talked About, But Have Failed This Country, You Are Their To Enrich Yourselves, Your Plans Would Have Worked If You Had No Thought Of Putting The Funds In Good Use. Salako.

  2. Truth man

    It looks as though the decision to introduce sales tax is a measure which the government is not sure about whether it will work or not! The consultations being talked about appear to be a research project than an expertly planned move to change the current VAT system which in my view is the best taxation system which is practiced in most developed as well as developing countries.The VAT system was introduced by the MMD government after they came into power in 1991.The sales tax regime has been here before during the UNIP era and we saw how basic and inefficient it was to enable government get the much needed financial collections especially from the manufacturing companies including the mines. Therefore it goes without saying that history taught us the faults of sales tax and to go back to that system is like a child who goes to play with fire after having been burnt before!

  3. David

    We dont know where we are going with this kind of leadership, Who are greedy dull and just after enriching themselves, There are no jobs in our country you fight for capital you open kantemba Tax is very high, paying alot of people,Such as; Cross borders, Task force, Council eish what a bad management we have in Zambia, Only God Knows

  4. ABC

    I hope begging will not be condemned coz all tax will be shouldered by the final consumer thieves won’t feel anything

  5. interigent agent

    I just don’t get it, how can Zambia become a lower middle income country yet u are aiming to enhance the domestic revenue taxes, this will be for sure against the final consumer (civil servants) its like 0 – 0 = 0, 4 -4=0. All the same, u have to be conducting experiments before implementation of Sach ideas,

    Like we do in science before coming up with a theory we firstly;

    -ask a question
    -conduct an experiment
    -interpret data
    -make an inference
    -form an hypothesis
    And -draw conclusion

    To make this country better economicaly u just have to stop the stealing and faking, u have to use wisely the funds in the reserves, invest heavly in agriculture and in the manufacturing industry, this is the only way, otherwise mwanakatwe your ideas and dreams can’t be proven to be correct in the senses of all rationale human

  6. Karakas

    I hear she is also a drunk.

  7. Karakas

    I hear she is also a drunkered.

  8. CM

    Introducing sales tax is another system to raise money get and running away from failure VAT refund. Give examples how sales tax will reduce poverty at house hold level. The effect of huge borrowing and spending in non wealth creation sectors has dawned. Have no confidence in minister at all

  9. Daniel Banda

    If that can make GRZ remember to pay us our terminal benefits, it’s okay.

  10. Jonas

    Mayo you have failed this country ,too many people complaining for none payment of salaries and terminal benefits by govermrnt

Comments are closed.