Haabazoka calls for deferment of the Sales Tax
By Staff Reporter
Economics Association of Zambia (EAZ) president Dr Lubinda Haabazoka says there is need to defer the implementation of sales tax to 2020.
Dr Haabazoka has proposed that in the meantime, government should zero rate domestic Value Added Tax for legal entities but keep import Value Added Tax.
He has proposed that Import VAT refunds should be suspended.
He said this move will seal the leakages but maintain revenue collected through VAT thereby meeting the budgetary targets.
“We should do everything possible to ensure that the Kwacha does not trade at K13 per dollar. On Friday the green back was trading at K12.5 per dollar from k12.1 on Wednesday. Ideally the Kwacha gains from April as mining companies scale up production, the agriculture sector exports their harvest among other factors,” he observed.
He added, “To avoid further speculation and adverse effects, it is advised that the difference between the Bid and Ask price should be above K0.5. This will stop players from speculating. We also need to boost our foreign exchange reserves by engaging businesses to help bring their foreign reserves into the country.”
Dr Haabazoka said the extractive industry should also be encouraged through the fiscal policy and other incentives to make Zambian banks primary holders of proceeds from the sale of mineral resources.
“There is also need to immediately restructure debt so as to make cash outflows match cash inflows. Infact, there should be cash inflow outflow matching to ensure that negative gaps are identified to avoid liquidity problems. The formula that can be used at national level should resemble that done by commercial banks,” he said.