By MUKOSELA KASALWE
THE proposed 2019 tax policy changes, if well carried out, will enhance domestic revenue collection and help Zambia reduce its dependence on external financing, Zambia Revenue Authority (ZRA) Commissioner General Kingsley Chanda has said.
Mr Chanda said the reintroduced sales tax was a simpler form of tax compared to the Value Added Tax (VAT) which he described as an administrative nightmare and a negative tax.
Appearing before the Expanded Budget Committee of Parliament yesterday, Mr Chanda said out of 450, 000 registered taxpayers under VAT, only 16, 000 were compliant.
Mr. Chanda said unlike the Sales tax of 1995, the reintroduced Sales tax would take into consideration concerns raised by various stakeholders such as not to tax medicines, staple food and other sensitive sectors of the economy.
“Similarly, the proposed reintroduction of the Sales tax will also significantly raise the contribution of consumption taxes to total revenue, which is the future of domestic resource mobilisation.
Further, the increased emphasis on the implementation of programmes that will enable Zambians participate in various economic activities provides the solid base for increased domestic revenue mobilisation in 2019. This will not only foster local investment but also provide an opportunity for poverty reduction through an all-inclusive participation in economic activities,” he said.
Mr Chanda said the mineral royalty tax would see to it that mines made a reasonable contribution to Zambia’s economy unlike the current 12.6 percent and gross domestic product which stood at only 4 percent.
Responding to MMD Mkaika Member of Parliament Peter Phiri as to which other countries in the region applied sales tax, Mr Chanda cited Angola, Libya and Eswatini as some of the countries applying the sales tax.
Mr. Chanda prodded the MPs to support the reintroduction of the Sales tax as it would immensely benefit the nation.