Lusaka ~ Sun, 27 Sept 2020
By ZR Reporter
This is aimed at empowering women and youth.
“Sir, to support women, youth, and small to medium enterprises, I propose to spend K266.3 million on various empowerment programmes. Out of this amount, K155.2 million will be allocated specifically to the youth,” Finance minister Dr Bwalya Ng’andu said.
The health sector on the other hand has been allocated K9.6 billion, which translates to 8.1% of the budget share and K13.7 billion, which is 11.5% of the budget share, has been allocated to education sector.
The minister disclosed that 4.0% of the budget which is K4,820,803,202 has been allocated to social protection.
To support the scaling up of agricultural productivity through mechanisation, the minister proposed to zero rate all tractors for Value Added Tax purposes and zero rate equipment used for full body sanitisation for a period of one year to combat the spread of COVID-19 with effect from midnight tonight.
He added that the Value Added Tax measures will result in a revenue loss of K5.1 million.
And Dr Ng’andu proposed the suspension of import duty on biological control agents to revamp the horticulture and floriculture subsectors and to promote other nontraditional exports.
The minister also proposed the removal of import duty on greenhouse plastics, reduced import duty to 15 percent from 25 percent on selected bulb plants and seedlings, reduced import duty on secateurs and pruners to 5 percent from the current 15 percent and 25 percent, respectively, the removal of import duty on selected agricultural clippers as well as the removal of export duty on crocodile skin.
To stimulate economic activity in other sectors, the minister proposed the removal of import duty on copper ores and concentrates to encourage local processing, suspension of import duty on importation of refrigerated trucks to support the domestic and export markets, reduced import duty to 5 percent from 25 percent on selected trimmings to promote the local garments and textile industry and lower import duty to 15 percent from 30 percent on electric motor vehicles to reduce the use of fossil fuel.
To support local production, build resilience and mitigate the revenue loss arising from the aforementioned measures, Dr Ng’andu proposed an ncrease on import duty to 40 percent from 25 percent on agro products such as beef and beef processed products, pork and pork processed products, chicken and chicken processed products as well as fish imported from outside the SADC and COMESA regions.
He also proposed the introduction excise duty at the rate of K1.50 per litre on reconstituted milk, he proposed that the import duty rate on reconstituted milk with other forms of milk should be harmonize at 15 percent, to adjust the specific excise duty rate on cigarettes to K302 per mille from K265 and to introduce a surtax at the rate of 20 percent on imported un-denatured ethyl alcohol of an alcoholic volume strength of 80 percent or higher.
He also proposed the introduction of excise duty on plastic flat bags at the rate of 30 percent and harmonization of the import duty rates of cotton and polyester fabric at 15 percent ad valorem rate or K1.82 per kilogram “whichever is higher.”
The minister has also proposed to exclude high value motor vehicles from the definition of used motor vehicles and subject them to ad valorem import duty.
“Sir, to resuscitate the tourism sector and promote local tourism, I propose the following measures:
a) Reduce corporate income tax rate to 15 percent from
35 percent on income earned by hotels and lodges on accommodation and food services;
b) Suspend import duty on safari game viewing motor vehicles, tourist buses and coaches;
c) Suspend license of renewal fees paid by
hotels and lodges;
d) Suspend the retention fees paid by tourism
e) Suspend registration fees for hotel managers,” he said.
“Mr. Speaker, I propose further tax incentives as follows:
f) Introduce a local content allowance for income tax purposes for utilisation of selected local raw materials to encourage local content qand value addition; and
g) Reduce the investment threshold for a Zambian citizen to qualify for tax incentives under the Zambia Development Agency Act No.11 of 2006 to US$100,000 from US$500,000 for those intending to operate in a priority sector, a multi facility economic zone or industrial park. Sir, the measures I have announced are in addition to the existing incentives and those granted in response to qqCOVID-19 earlier this year.”
Dr Ng’andu also proposed to amend the Income Tax Act, Customs and Excise Act, Property Transfer Tax Act, Value Added Tax Act, Zambia Revenue Authority Act and Zambia Development Agency Act so as to update, strengthen and remove ambiguities in certain provisions of the tax laws and make tax administration more effective.
He also proposed to increase various immigration permit fees to cost recovery levels whilst remaining competitive.
“Further, I propose to remove the discount granted to the public on fees where payment for online registration of a private company limited by shares and the filing of annual returns made online on the e-PACRA System. Sir, the non-tax revenue measures will result in a revenue gain of K173.0 million. Mr Speaker, the measures that I have outlined will take effect on 1st January, 2021,” he said.