2019 proposed budget not favoring employment creation- ZFE

The Zambia Federation of Employers (ZFE) says the 2019 proposed budget does not favour employment creation as a number of taxes proposed will not only increase the cost of doing business, but also make the country unattractive for investment flow.

Addressing a media briefing in Lusaka, ZFE president Wesley Chishimba says the federation finds the proposed abolishment of the value added tax and replacing it with the sales tax, as measure which only favours government in terms of avoiding refunds to the private sector.

Mr. Chishimba is hopeful that in determining the sales tax, the rate will be lower than the current VAT rate of 16 percent.

He says other notable taxes proposed in the budget which ZFE is concerned about include the 30 percent restriction on interest allowable for deduction for tax purposes, which he says is not only detrimental to the business community, but also to government as most businesses in Zambia start and expand on borrowed funds.

Mr Chishimba has also called on parliamentarians to reject the proposed increase of customs duty on powdered milk to 15 percent from 5 percent, stressing that powdered milk is very helpful to a working but breast feeding mother as it acts as a substitute for breast milk.

And on the changes to the mining tax regime, the ZFE President has proposed that government engages the sector players on the proposed tax regime changes so that there can be a win-win mechanism of taxing mining companies.

Mr. Chishimba is however, happy to note that the 2019 national budget will take care of the cost of concluding on the labour law reforms further hoping that the amendment bill will be tabled in the first quarter of 2019