Mutati raises concerns over sales tax implementation in July

By Staff Reporter

Former Finance minister Felix Mutati has called for another deferment to the implementation of the sales tax regime to allow for a detailed economic impact assessment and instead address the administrative issues of the Value Added Tax (VAT) regime.

But her successor Margret Mwanakatwe said the implementation of the sales tax would not be deferred any further from the July deadline.

Speaking before a Parliamentary Budget Committee on Thursday in his capacity as Global Ambassador for ACCA, Mutati said going ahead with the implementation of the sales tax will negatively affect the business community, especially local distributors.

Mutati was of the view that introducing a new tax will not resolve the issue of tax refunds for the Zambia Revenue Authority.

He further submitted that the Sales Tax had a limited audit trail throughout the supply chain as compared to the value added tax which has a self-enforcing mechanism.

The Sales Tax Bill of 2019 has a number of objectives, which include the introduction of a sales tax on the supply of goods by manufacturers, producers, distributors, wholesalers and retailers and the importers of goods into the country.

The proposed Sales Tax aims at putting a stop to the escalation of VAT refunds, dating back to 2009, and estimated at a cost K17.9 billion as at January 9, 2019.

The objective of the Bill is to revise the turnover tax threshold from K800, 000) per annum to K500, 000 in order to harmonize it with the Sales Tax threshold.